ASIC Enforcement Wrap: July 2025 | ASIC loses Finder Appeal

Key July Takeaways:

• Federal Court orders a $3.5 million civil penalty against ACBF Funeral Plans for ‘egregious’ and ‘callous’ conduct relating to misrepresentations of its governance.
• ASIC commences civil penalty action against Fortnum Private Wealth alleging it failed to adequately manage cybersecurity risks and thereby breached its ‘general obligations’ as an Australian financial services licensee, in a case that will shape how licensees manage cyber risk.
• ASIC’s banning of eleven individuals during July from providing financial services or engaging in credit activities highlights ASIC’s continued vigilance in the financial services industry.

Spotlight– Cryptocurrency product held not to be debenture by Federal Court

The Full Federal Court has dismissed an appeal by ASIC which claimed that a product marketed by Wallet Ventures Pty Ltd (at the time of primary judgment, Finder Wallet Pty Ltd) was a debenture as defined by s 9 of the Corporations Act 2001 (Cth) (the Act), therefore a financial product and Wallet Ventures was required to hold an AFSL.

Wallet Ventures is a digital currency exchange provider who allows customers to buy and sell cryptocurrency assets. They marketed the “Finder Earn” product for customers to sell cryptocurrency to them and earn a return. In its “Finder App”, Finder Earn used a cryptocurrency called “TrueAUD”, where a customer would allocate an amount of TrueAUD to Wallet Ventures. Once this allocation was made, the “Earn Term” would commence and the customer would earn a “return” of 4.01% p.a.

ASIC commenced proceedings against Wallet Ventures, alleging that Finder Earn was a debenture and required Wallet Ventures to hold an Australian Financial Services Licence (AFSL) which it did not have at the time of offering the product.

The primary judge held that Finder Earn was not a debenture.

Debenture is defined in the Act as “a chose in action that includes an undertaking by the body to repay as a debt money deposited with or lent to the body.”

ASIC submitted in its first ground of appeal that the Finder Earn product ought to be considered a loan or deposit of moneys. It contended that the customer lent money where it entered into a single arrangement to acquire and allocate TrueAUD to Wallet Ventures.

However, the Full Court agreed with the primary judge’s conclusion that Finder Earn did not involve “an undertaking [by Wallet Ventures] to repay as a debt money deposited with or lent to [it]” within the meaning of debenture in s 9.

The Court described the arrangement as being more analogous to lending, as in securities lending, than a monetary debt.

The customer acquired a form of fungible intangible property, TrueAUD, passed its title to Wallet Venture, received fungible property of the allocation plus the return, and exchanged the fungible property for an AUD credit.

The Court held that in the arrangement, TrueAUD was a species of property, but not money in the sense used in the definition of debenture. Wallet Venture’s terms of service also made it clear that it was not money deposited or lent to them.

This is a significant piece of appellate consideration of the complex financial services laws relating to defining what is, and is not, a financial product.

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July in Summary – Enforcement Actions and Outcomes

Civil Action:

Civil Proceedings Commenced

ASIC commenced two civil proceedings:

• ASIC commenced proceedings in the Federal Court to disqualify David John Catsoulis from managing corporations. ASIC alleges that Mr Catsoulis was an officer of Warwick Gold Holdings Pty Ltd and Impact Gold Ltd (the Companies) between 2021 and 2024. In 2024, the Companies were ordered to be wound up. ASIC alleges that the Companies entered into disadvantageous agreements under Catsoulis’ management which ultimately contributed to their failures.
• ASIC has commenced proceedings against Fortnum Private Wealth in the New South Wales Supreme Court. ASIC alleges that the financial advice business failed to meet its cyber security obligations outlined in the Corporations Act 2001(Cth), and as such endangered its authorised representatives and clients to an “unacceptable level of risk of a cyber-attack”. This civil proceeding follows a breach in the company’s cyber security in 2021 and 2022, which lead to more than 9,000 client’s data being published on the dark web.

Civil Penalties

The Federal Court ordered civil penalties totalling $3.5 million in one case:

• The Federal Court has ordered a $3.5 million civil penalty against ACBF Funeral Plans Pty Ltd (in liquidation) (ACBF), a funeral expenses insurance provider, for misrepresentations. ACBF made representations that it was Aboriginal owned or managed when it was not, where the Court found this conduct to be deliberate, callous, and egregious. The $3.5million penalty is in addition to a $1.2 million penalty ordered in September 2023, where ACBF made misrepresentations that consumers would receive a lump sum payment. The total penalties awarded against ACBF are therefore $4.7million, however, ASIC is not to enforce either penalty without leave of the Court because ACBF is in liquidation.

Civil Judgments

Three judgments were delivered in ASIC civil proceedings:

• The Federal Court has dismissed ASIC’s proceedings against Daniel McCarthy, current managing director of TerraCom, and Nathan Boom, Wallace King, and Crag Ransley, TerraCom’s former officers. ASIC alleged that the mining company mislead investors by providing false information to the Australian Securities Exchange(ASX), and that the Directors and officers of TerraCom failed to act with the due diligence required of their positions. ASIC’s case relied heavily on whistleblower claims about TerraCom coal quality manipulation. However, presiding Justice Ian Jackman criticised this approach as “plainly untenable”, ruling that there was not sufficient evidence that the executives knew, or ought to have known, that the market statements were misleading.
• The Full Federal Court unanimously dismissed an appeal by Cigno Australia Pty Ltd and BSF Solutions Pty Ltd. The Full Court upheld the Court’s previous judgment on 24 May 2024 that found that Cigno Australia and BSF Solutions engaged in credit activity without an Australian Credit Licence and charged consumers prohibited fees.  The Full Court held that there was no error by the primary judge in reaching his conclusion of breaches relating to the No Upfront Charge Loan Model, a shared business model between the two companies, which was designed to avoid consumer protection laws. The Full Court also upheld findings that Cigno Australia director Mark Swanepoel and BSF Solutions director Brenton Harrison were involved in those contraventions.
• The Federal Court found that James Mawhinney, Mayfair 101 Group director, was associated with or involved in contraventions by companies in the Mayfair 101 Group. The Court found that by failing to disclose in their marketing material that investor redemptions had been suspended, Mayfair 101 Group companies made multiple false or misleading representations and engaged in misleading or deceptive conduct. The Court also found that Mayfair 101 Group company IPO Capital carried on a financial services business without an Australian Financial Services Licence. The Court held that Mr Mawhinney was involved in these contraventions.

Civil Appeals

ASIC appealed one civil proceeding:

• ASIC has appealed the 2024 Federal Court decision that found that the Pre-Existing Condition Terms of insurer HCF Life Insurance Company Pty Ltd (HCF) were misleading but not unfair. HCF’s Product Disclosure Statements and insurance contracts allowed the company to deny coverage if a consumer had a pre-existing medical condition, even if that condition was undiagnosed and unknown at the time the policy commenced. ASIC alleged that this wording misled consumers about their rights under section 47 of the Insurance Contracts Act 1984 (Cth) (ICA), which limits an insurer’s ability to refuse claims based on pre-existing conditions. However, the Court rejected ASIC’s claim that the terms were unfair, as they did not meet all three criteria for an unfair contract term under section 12BF of the ASIC Act. While HCF’s terms did pose some detriment to consumers—satisfying one criterion of the unfair contract test—they were not deemed to create a significant imbalance of power between the consumer and insurer and were considered reasonably necessary to protect the company’s legitimate interests.

Other Civil Actions

The Federal Court made other orders in two cases:

• The Federal Court has made interim travel restraint orders against David Anderson and Simon Selimaj, the directors of Falcon Capital Limited. Mr Anderson and Mr Selimaj are prohibited from leaving or attempting to leave Australia until 27 February 2026. The Court has also made interim freezing orders until 27 February 2026 against Mr Selimaj, which prohibits him from moving his property from Australia, dealing with or disposing of property, incurring new liabilities, and disposing of or dealing with money held in bank accounts.
• The Supreme Court of New South Wales has ordered Liberty Primary Metals Australia Pty Ltd, Tahmoor Coal Pty Ltd and Liberty Bell Bay Pty Ltd (companies in the GFG Alliance Group)to lodge outstanding annual reports with ASIC. Large proprietary companies aregenerally required to lodge their annual reports with ASIC each year. Liberty Primary Metals Australia and Tahmoor Coal failed to lodge annual reports with ASIC for the 2024 financial year. Liberty Bell Bay failed to lodge annual reports with ASIC for the financial years ending in 2021, 2022, 2023, and 2024.

Criminal:

Charges

Two individuals were charged with criminal offences:

• Glenn Alexander Rosewall, former Executive Chairman of BBY Limited (BBY), has been charged with aiding, abetting, counselling, or procuring BBY’s dishonest conduct in relation to BBY’s use of $1.95 million of client money to facilitate payment of an unrelated corporate invoice. Mr Rosewall was charged with two offences contrary to sections 1041G and 1311 of the Corporations Act 2001 (Cth) and section 11.2(1) of the Criminal Code (Cth).
• Donald James Cuthbertson, former director of Professional Wealth Management (PWM), Professional Wealth Management Services, and Professional Wealth Investments, has been charged with dishonest conduct. Mr Cuthbertson was charged with making a series of dishonest representations to potential investors regarding the share valuations, earnings, and dividends of his company PWM. These misrepresentations ultimately resulted in the loss of no less that $850,000 to at least six investors, and contravened section 1041G of the Corporations Act 2001 (Cth). Each instance of contravention of s 1041G of the Corporations Act 2001 (Cth).  carries a penalty of 10 years’ imprisonment and/or 4,500 penalty units ($945,000).

Convictions

Three individuals were convicted of criminal offences:

• Brent Smith, Mahmoud Khodr and Fue Mano, Remedy Housing officials, were convicted for their roles in relation to promoting interest-free mortgages. A jury found Mr Smith guilty of 7 counts of dishonestly using his position as a director, Mr Khodr guilty of 2 counts of dishonestly using his position as a director and officer, and Ms Mano guilty of 11 counts of dishonestly using her position as an officer. The three dishonestly represented to consumers that Remedy Housing would provide an interest-free mortgage, that if they could not provide an interest-free mortgage within 12 months the consumer’s deposit would be fully refunded, and that Remedy Housing was financed by overseas investors. In fact, Remedy Housing had no investors, never provided any mortgages, and the funds it acquired from customers’ deposits were used to operate the scheme.

Sentencing

Two individuals were sentenced:

• Joshua Fuoco, former Wealth and Risk Management director, has been convicted and sentenced to 12-months imprisonment suspended for two years by the Federal Court for deliberately defying court orders made in February 2018. The Court had prohibited Mr Fuoco from conducting or being involved in a financial services business for ten years. Mr Fuoco was found to have been involved in five financial services businesses between March 2019 and April 2023, where over $2.2 million of income was generated through the business. The Court found Mr Fuoco guilty of all 19 charges of contempt.
• Daniel Kirby was sentenced to 2 years and 11 months’ imprisonment, to be released after 12 months of recognisance of $1,000 on condition of good behaviour for a further 3 years. Mr Kirby’s convictions relate to his role as director of the Berndale Group, where he committed dishonest conduct in relation to false or misleading documents submitted to the auditor, and use of company funds which were illegally transferred to benefit himself and other associates.

Administrative action:

Infringement Notices

• Skye Money Pty Ltd and Smart Financial Capital Pty Ltd each paid an infringement notice penalty issued by ASIC of $31,300 on 1 July 2025 and 11 July 2025, respectively. ASIC considered it had reasonable grounds to believe that both companies had authorised an unregistered financial adviser to give personal advice to a retail client. Each company immediately registered their financial adviser and reported the breach to ASIC after becoming aware of it.

Licence Cancellation/Suspension

Eleven companies had their Australian Financial Services (AFS) licence or Australian credit licence suspended or cancelled:

• ASIC has cancelled the AFS licence of Downunder Insurance Services Ltd, effective 24 June 2025, and Ipraxis Pty Ltd, effective 25 June 2025. Under s915B(3)(e) of the Corporations Act, ASIC cancelled the licences of the two financial services providers for failing to pay industry funding levies which were outstanding for over 12 months.
• ASIC has cancelled seven Australian credit licences and suspended one for failing to hold Australian Financial Complaints Authority (AFCA) membership. David Anthony Ross had his licence suspended 4 June 2025. A number of individuals and companies had their licence cancelled, including Capital House Pty Ltd (cancelled 11 July 2025), Glove Finance Pty Ltd (cancelled 25 March 2025), JTan Pty Ltd (cancelled 31 March 2025), M&H Pty Ltd (cancelled 3 July 2025), Oz Finance Professional Pty Ltd (cancelled 2 April 2025), Peppermint Loans Pty Ltd (cancelled 27 June 2025), and Sheree Nicole Becker (cancelled 27 June 2025). Licensees are required by law to be a member of AFCA.
• ASIC has cancelled the Australian credit licence of Lendflex Holdings Pty Ltd (ACN 667 383655) (Lendflex), effective 15 July 2025. Lendflex failed to lodge its 2024 annual compliance certificate and to nominate its Key Person for its licence.

Director Disqualifications

ASIC disqualified one individual from managing corporations:

• ASIC has disqualified Anthony Azizi from managing corporations for five years. Between January 2001 and September 2021, Mr Azizi was the director of Trinity Constructions (Aust) Pty Ltd, Regal Consulting Services Pty Ltd, and Trinco Pty Ltd. The three companies owe a total of $93,708,563 to over 300 unsecured creditors including the Australian Taxation Office and various small businesses. ASIC found that Mr Azizi acted improperly and failed to meet his obligations as a director.

Bannings

ASIC banned eleven individuals from providing financial services and/or engaging in credit activities:

• Kiriley Roper, a former financial adviser and director, has been banned for ten years by ASIC effective 30 June 2025 from providing financial services, carrying on a financial services business, and controlling an entity that carries on a financial services business. While Ms Roper was a director, shareholder, and financial adviser of Lighthouse Partners, ASIC found that Lighthouse Partners engaged in fees for no services conduct in relation to 14 clients. ASIC found that Ms Roper was aware of the conduct, failed to report it to the licensee Crown Wealth Group, failed to investigate the conduct and failed implement systems to prevent it from re-occurring. ASIC also found that Ms Roper is not a fit and proper person to participate in the financial services industry due to failing to refund fees to the affected clients and failing to fulfill her director’s duties.
• Barry David King, former financial adviser, has been permanently banned by ASIC effective 1 July 2025 from providing financial services, carrying on a financial services business, and controlling an entity that carries on a financial services business. ASIC found that Mr King is not a fit and proper person to provide financial services. ASIC also found that he is likely to contravene a financial services law due to Mr King concealing information from clients, making false representations to ASIC, providing false documents to clients, managing client funds without written authorisation, misusing client funds, and failing to provide clients with records of their investments.
• Andrew Moore, former director, responsible manager, and head of compliance at Crown Wealth Group (CWG), has been banned for three years by ASIC effective 3 July 2025 from carrying on a financial services business, and controlling an entity that carries on a financial services business. ASIC found that Mr Moore failed to recognise the seriousness of the fees for no service conduct engaged in by Lighthouse Partners, one of CWG’s representatives. As a result, the conduct was not investigated, and the affected clients were not remediated. ASIC found that Mr Moore ought to have identified that the conduct should have been lodged with ASIC as a reportable situation, where CWG did not lodge a reportable situation with ASIC until 6months after it became aware.
• Isaac Jacob McQueen, former financial adviser of MWL Financial Services Pty Ltd, has been banned for four years by ASIC effective 17 June 2025 from providing financial services, carrying on a financial services business, and controlling an entity that carries on a financial services business. ASIC found that Mr McQueen provided inappropriate advice to certain clients when recommending that they invest most of their superannuation into the High Growth class or the Growth class of the Shield Master Fund, which were high risk investments.
• Matthew Simon Bradley, former financial adviser of MWL Financial Services Pty Ltd, has been banned for eight years by ASIC effective 3 July 2025 from providing financial services, carrying on a financial services business, and controlling an entity that carries on a financial services business. ASIC found that Mr Bradley provided inappropriate advice to certain clients when recommending that they invest most of their superannuation into the High Growth class or the Growth class of the Shield Master Fund (Shield), which were high risk investments, or the Balanced class, which was a medium-high risk investment. ASIC further found that Mr Bradley’s statements of advice to certain clients included false or misleading statements that implied clients would see better returns if their superannuation was invested with Shield.
• Jason Damien Prasad, a former insurance broker, has been permanently banned by ASIC effective 3 July 2025 from providing financial services or engaging in credit activities, carrying on a business that carries on financial services or credit activities, and controlling an entity that carries on a financial services business or credit activities. On 28 November2024, Mr Prasad was convicted of two counts of dishonestly obtaining a financial advantage by deception in relation to fraudulent insurance documents. ASIC may permanently ban a person from providing financial services or engaging in credit activities if they are convicted of fraud.
• Matthew Allen Beresford has been permanently banned by ASIC effective 5 July 2025 from engaging in financial services and credit activities. Mr Beresford used a false identity and fraudulent bank accounts to establish a business which offered financial advice and services. The business’ website falsely claimed its representatives held an Australian Financial Services License. Investors had deposited approximately $374,000 into the various fraudulent bank accounts.
• Rocco D’Amelio and Robert Crossing have been banned by ASIC from providing financial services, controlling an entity that carries on a financial services business or performing any function involved in the carrying on of a financial services business. Both former financial advisors of MWL Financial Services Pty Ltd (MWL) were found to have given inappropriate advice to clients, encouraging them to invest their superannuation into the Shield Master Fund (Shield). Mr D’ Amelio has been banned for 7 years, and Mr Crossing for 6 years, with both bans taking effect on 18 July 2025.
• Emmanuel Adu, a former credit representative, has been permanently banned by ASIC effective 1 July 2025 from engaging in credit activities, controlling an entity which engages in credit activities, and performing any function relating to credit activities. On two separate occasions, Mr Adu altered his Australian Federal Police certificates to remove his criminal history when submitting the certificates when applying to become a credit representative. Mr Adu was subsequently convicted of two offences contrary to s145.4(1) of the Criminal Code Act 1995 (Cth).
• Ian Wales Potter has been banned for five years by ASIC effective 25 July 2025 from providing financial services, carrying on a financial services business, and controlling an entity that carries on a financial services business. ASIC determined that the financial advice that Mr Potter gave was not in his clients’ best interests because he did not make reasonable inquiries into his clients’ circumstances, and he provided distorted projection graphs and tables of funds. ASIC also found that the documents on the client files were substantially similar.

Auditor Actions

The Companies Auditors Disciplinary Board (CADB) issued one decisions:

• On 30 June 2025, the CADB admonished Simon Christopher Trivett, a partner of Grant Thornton Audit Pty Ltd, for failing to adequately and properly perform the duties of a Review Auditor in relation to the audit of the financial statements of iSignthis Ltdfor the financial year ended 30 June 2018. The CADB further ordered Mr Trivettto provide various undertakings to ASIC and pay ASIC’s fixed costs of the application of $490,000.

If any of the above is relevant to you or you want to know more, please feel free to get in touch.

The contents of this article do not constitute legal advice and it is not intended to be a substitute for legal advice and should not be relied upon as such.  It is designed and intended as general information in summary form, current at the time of publication, for general informational purposes only.  You should seek legal advice or other professional advice in relation to any particular legal matters you or your organisation may have.