ASIC Enforcement Wrap: July 2026

‍Key July Takeaways:

• ASIC has secured record enforcement outcomes in FY2025-26, including $830 million in civil penalty orders and $644 million returned to Australians. 
• ASIC intensified its focus on gatekeepers. Proceedings against the First Guardian auditors, the penalty imposed on ASX over the CHESS replacement project, and the judgment against Noumi's former CEO demonstrate ASIC's willingness to pursue not just primary wrongdoers, but also directors, auditors and market operators whose failures undermine confidence in financial markets.
• ASIC’s enforcement programme continues to focus on investor protection where governance failures expose retail investors to significant loss. This month saw ASIC commence proceedings against the auditor of First Guardian and First Mutual Private Equity and take administrative action in relation to financial services licensee Capital Guard, , issued stop orders in relation to certain StratFund products and banned or suspended multiple financial services representatives or licensees.

Spotlight – Harvey Norman and Latitude Ordered to Pay $55 Million for Misleading Advertising

The Federal Court ordered Harvey Norman Holdings Ltd and Latitude Finance Australia to pay combined penalties of $55 million for misleading consumers in a nationwide advertising campaign promoting “60 months interest free” and “no deposit” purchases. Harvey Norman was fined $35 million and Latitude $20 million. The advertisements appeared thousands of times on television, radio and in newspapers between January 2020 and August 2021 and were likely seen by millions of Australians. The Court found that the advertisements failed to disclose adequately that customers had to obtain a continuing credit card account, generally a Latitude GO Mastercard, and would incur additional charges, including monthly account-service fees and, before March 2021, establishment fees. A customer who entered the arrangement after 16 March 2021 and repaid a purchase over the full 60 months could pay at least $537 in fees beyond the purchase price. Justice O’Bryan said both companies placed their sales and commercial interests above consumers’ interests and distorted competition in the markets for retail goods and finance. He described their compliance systems as wholly inadequate, particularly given the companies’ size and sophistication.

Although the Court considered Harvey Norman and Latitude equally responsible for the misleading advertisements, Harvey Norman received the larger penalty because it showed less contrition. The judge also referred to public statements by Harvey Norman’s chairman that appeared to disregard the potential harm suffered by consumers and concluded that a stronger penalty was required to deter future breaches and encourage improved compliance. Both companies were also ordered to display prominently corrective advertisements on their website homepages for 90 days.

ASIC described the decision as an important warning that businesses promoting financial products must explain clearly the full nature, costs and ongoing obligations of offers described as interest free. The penalties followed an initial Federal Court liability ruling in October 2024 and the dismissal of the companies’ appeals by the Full Federal Court in September 2025.

July in Summary – Enforcement Actions and Outcomes

Civil Action

Civil Proceedings

ASIC commenced one civil proceeding in the Federal Court:

• ASIC has commenced Federal Court proceedings against Auditeo Australia Pty Ltd and auditors Ajm Didarul Islam Khan and Brian Robert Taylor, alleging serious failures in their audits of the First Guardian Master Fund and its compliance plan between the 2020 and 2024 financial years. ASIC alleges the defendants issued unqualified audit reports that were materially false or misleading because they lacked a reasonable basis and failed to comply with required accounting and assurance standards. According to ASIC, the auditors did not obtain sufficient and appropriate audit evidence or exercise the required level of due care and skill. The regulator alleges that no financial audit was actually conducted for the 2021 financial year despite an audit report being issued. It further alleges that approximately $137 million of reported assets were left entirely untested in 2022, increasing to around $170 million in 2023, and that the auditors failed to apply the correct compliance plan during parts of the 2022 and 2023 audits. ASIC contends these failures occurred before the collapse of the First Guardian Master Fund, which affected more than 6,000 investors and could result in losses of up to $446 million. ASIC emphasised that auditors perform a critical gatekeeper role in protecting investors and maintaining confidence in financial markets, and that reliable compliance plan audits are fundamental to safeguarding retail investors. ASIC is seeking declarations of contravention, financial penalties, injunctions restricting future audit work, and other orders. The proceedings form part of ASIC's 2026 enforcement priority of pursuing accountability for the collapse of First Guardian and related investment funds

The Federal Court ordered over $78 million in civil penalties against four companies:

• The Federal Court has ordered ASX Limited to pay a $20.5 million penalty for misleading statements relating to its failed CHESS replacement project. The Federal Court found ASX made misleading representations about the progress and readiness of the blockchain-based replacement system, with ASIC describing the matter as significant to maintaining confidence in Australia's financial market infrastructure.
• The Federal Court ordered Deutsche Bank Aktiengesellschaft to pay a $2 million infringement penalty for systemic trade reporting failures. ASIC found deficiencies in the bank's reporting of over-the-counter derivatives transactions, undermining the transparency and integrity of Australia's trade reporting regime.
• The Federal Court imposed $55 million in penalties on Harvey Norman and Latitude Finance for misleading “interest free” and “no deposit” advertising that obscured the real cost and conditions of the finance arrangements.  See further detail above. 

The Markets Disciplinary Panel fined WealthHub Securities Limited (WealthHub) $1.005 million following an ASIC investigation. . The online broker, owned by National Australia Bank (NAB) was found to have systemically failed to meet its regulatory reporting obligations. 

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Civil Judgments

The Federal Court delivered judgment in one case:

• The Federal Court has found former Noumi chief executive Rory Macleod breached his duties as a director and officer in relation to the company's financial reporting. The Court found Mr Macleod contravened the Corporations Act by failing to exercise reasonable care to ensure compliance with financial reporting obligations, particularly concerning unsaleable inventory and the premature recognition of revenue from lactoferrin sales. 

Other Civil Actions

The Federal Court made other orders in two cases:

• The Federal Court has ordered Capital Guard AU Pty Ltd be wound up and liquidators appointed following ASIC action. ASIC successfully applied to wind up Capital Guard after raising concerns about the handling of investor funds, the promotion of non-existent bond investments and serious failures in governance and compliance. The Court appointed liquidators to investigate the company’s affairs and protect investor interests. 
• The Federal Court has ordered First Mutual Private Equity and its unregistered managed investment scheme, operated by Gregory Raymond Cotton, be wound up. ASIC raised concerns about the operation of the scheme and investor protections, with the appointment of liquidators following prior court-ordered asset freezing orders. 

Criminal Action

Convictions

One individual was convicted of criminal charges:

• Former WA director Joanne Pellew has been convicted of multiple Corporations Act offences following an ASIC investigation.  A jury found Ms Pellew guilty of three counts of three counts of dishonestly using her position as a director contrary to s184(2)(a) and one count of managing corporations while disqualified contrary to s206A(1)(a) of the Corporations Act 2001 (Cth). Each offence carries a maximum penalty of five years.  She is  due to be sentenced on 4 September 2026. 

Sentencing

Two individuals were sentenced in criminal matters:

• Former construction company director Vickie Vella has been sentenced to 18 months imprisonment after using approximately $1.2 million of company funds for personal purposes. Ms Vella was the former director of Coast Reo Pty Ltd and Midcoast Reinforcement Pty Ltd. The companies traded as Newcastle Plastamasta, Central Coast Plastamasta and Port Macquarie Plastamasta. These companies supplied plasterboard and steel to the Central Coast and Port Macquarie areas of NSW. ASIC's investigation found Ms Vella misappropriated company money over an extended period, using corporate funds for personal expenses. Between about 4 August 2016 and 5 April 2018 Ms Vella withdrew a total of approximately $1,216,806.00, using the funds on iTunes, gambling, and Star City Hotel Pyrmont subscriptions. The Court imposed a sentence reflecting the seriousness of directors dishonestly using company assets for private benefit.
• The local court of New South Wales has sentenced former finance director Brendan Gunn to 12 months imprisonment following his handling of funds reasonably believed to be the proceeds of crime. From December 2018, Mr Gunn was a director of Mormarkets Pty Ltd, trading as Coinshype. Mormarkets received deposits from Australians for cryptocurrency and other purported investments. Gunn pleaded guilty after handling more than $180,000 that was reasonably suspected of being linked to an offshore investment scam targeting Australians. He was sentenced to 12 months' imprisonment, to be released immediately upon entering into a recognizance of $3000 requiring he be of good behaviour for 12 months.  

In addition, Former insurance broker Craig Horsell has had a previously suspended sentence activated following further offending. The former South Australian insurance broker and company director was ordered to serve a previously suspended three-year prison sentence after breaching the conditions of his release by committing a further deception offence. Horsell had originally been convicted in 2013 following an ASIC investigation into his dishonest conduct while operating insurance brokerage businesses. Between 2007 and 2010, he diverted 89 client insurance premium payments totalling approximately $414,000 into his personal bank account, falsified bank statements to conceal the theft, and cancelled some clients' insurance policies, temporarily leaving them without insurance cover. In 2013, Horsell received a three-year prison sentence and a $75,000 fine, but the prison sentence was wholly suspended  on the condition that he remain of good behaviour. The District Court of South Australia found that he breached this condition by committing a separate deception offence against a bank between 2015 and 2018. As a result, the Court activated the previously suspended sentence and imposed a further sentence of two years, eight months and ten days' imprisonment, to be served partly cumulatively, resulting in a total effective sentence of three years, eight months and ten days. 

Administrative Action

Bans

Five individuals were banned by ASIC from providing financial services:

• ASIC has banned former NextGen Financial Group directors Nicholas Brookes and Vitorio Turco from managing or controlling financial services businesses for three years. ASIC found both men were linked to NextGen’s failure to comply with multiple Australian Financial Complaints Authority (AFCA) determinations relating to inappropriate financial advice involving self-managed superannuation funds and property investments. Consumers were ultimately compensated through the Compensation Scheme of Last Resort after NextGen failed to make the required payments.
• ASIC has banned Queensland property developer Jack Gould from providing financial services for four years. ASIC found Mr Gould was not a fit and proper person to participate in the financial services industry following conduct that raised concerns about his competence, honesty and judgment – namely using investor funds outside of the purpose they were raised for.
• ASIC has banned former MWL financial adviser Nicole Niu for five years. ASIC found Ms Niu provided inappropriate financial advice and failed to comply with her obligations as a financial adviser, including deficiencies in the advice process and record keeping. 
• ASIC has banned former MWL financial adviser Christian Henry for three years..

Licence Suspension or Cancellation

Six companies had their Australian financial services licence (AFSL) or Australian credit licence (ACL) suspended or cancelled:

• ASIC cancelled the AFSL of Capital Guard AU Pty Ltd (Capital Guard), effective 29 June 2026, after finding that it engaged in dishonest conduct. ASIC found that Capital Guard used a fake bond prospectus for a bond that did not exist, encouraged and facilitated client investment into that non-existent bond (where it obtained at least $100,000 from investors), made misleading or deceptive statements on its website, and provided false documents to an auditor. ASIC believes that this conduct indicates a risk of ongoing non-compliance, prompting it to cancel the licence.
• ASIC has suspended the AFSL of Prime Value Asset Management Limited. ASIC took action after identifying concerns regarding the company's compliance with its licence obligations, as it failed to meet its statutory audit and financial reporting lodgement obligations for the financial years ending 2024 and 2025. 
• ASIC has cancelled the AFSL of Australian Fiduciaries Limited, which is in liquidation. The company failed to pay a determination made by AFCA on 30 January 2026. As a result, the Compensation Scheme of Last Resort (CSLR) paid the $150,000 determination, and ASIC cancelled their AFSL.  
• ASIC has cancelled CAIP Services Pty Ltd's AFSL after the company ceased carrying on a financial services business. ASIC said licensees must continue to meet regulatory requirements and maintain active operations to retain their licence.
• ASIC has cancelled the AFS licence of CFD issuer Trive. ASIC determined the company no longer met the requirements to hold an AFS licence as it ceased to carry on as a financial services business. 

Director Disqualifications

ASIC disqualified two individuals from managing corporations:

• The Federal Court permanently disqualified Larry Dawson from managing corporations after finding that he had committed serious and prolonged breaches of his directors' duties by allowing his company, PW Kitt Co Pty Ltd, to be used as a vehicle for a sophisticated investment fraud between 2019 and 2020. Although the scheme was orchestrated by overseas fraudsters, Dawson established and controlled the company's bank accounts, facilitated the movement of investors' funds, including transfers into cryptocurrency accounts, failed to supervise the company's activities, and enabled approximately $7 million of Australians' retirement savings to be misappropriated.
• ASIC has disqualified Queensland director David Fanning from managing corporations for five years. ASIC found Mr Fanning had been involved in the failure of multiple companies between 2020 and 2022, including Kabi Metal Fabrication Pty Ltd, EZ Machinery Australia Pty Ltd, Xtract Engineering and Fabrication Pty Ltd, and EZ Machinery Global Pty Ltd. Section 206F of the Corporations Act allows ASIC to disqualify a person from managing corporations for a maximum period of five years if, within a seven year period, the person was an officer of two or more companies, and those companies were wound up and a liquidator provides a report to ASIC about each of the company’s inability to pay its debts.

Stop Orders 

ASIC issued one stop order:

• ASIC has issued stop orders against two products offered under StratFund's Australian Fixed Income Fund. Wealthon Vault Development Fund and The People’s Equity Fund have been targeted by ASIC over concerns that their target market determination may not appropriately identify suitable consumers. 

Other Enforcement Actions:

• ASIC has taken administrative action against 36 self-managed superannuation fund (SMSF) auditors for compliance failures. Between January and June 2026, ASIC disqualified four SMSF auditors, suspended three, imposed additional conditions on eight and cancelled the registrations of 21 auditors. ASIC cited serious breaches including failures to maintain independence, non-compliance with auditing standards, inadequate professional development and annual statement lodgement failures. ASIC’s has undertaken enforcement action against 64 SMSF auditors in FY2026. 
• ASIC has reported that banks have paid more than $55 million in compensation for mortgage offset account failures. A review of eight banks found weaknesses in the setup, monitoring and management of offset accounts, causing some customers to miss out on interest savings. ASIC identified inconsistent detection of failures, poor record keeping and delays in remediation, and warned the full extent of customer harm may still be emerging as banks continue reviewing affected accounts.

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. 

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