Mackay Chapman September 2025 ASIC Update

In this month’s ASIC update:

• A financial advisor extradited from NZ on stealing charges
• Mining company to pay $7.5 million for whistleblower breaches
• ASIC proposes new rules for AI and automated trading
• ASIC warns of surge in celebrity-endorsed investment scams
• ASIC targets failing financial reporting
• NAB and AFSH penalised for hardship failures
• Directors fined for serious fundraising breaches

Keep reading for more information and key details.

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Financial advisor extradited from NZ on stealing charges

Former financial advisor Marion Joan Pearson has been extradited from New Zealand and appeared in a Perth court to face 136 counts of stealing. The charges are related to the alleged misappropriation of approximately $4.1 million from 13 clients between 2009 and 2013.

After years of legal appeals, Ms Pearson was successfully extradited by Australian authorities. She was remanded in custody following her court appearance on 21 August and is scheduled to reappear at the Stirling Gardens Magistrates Court on 1 October 2025.

ASIC investigated the matter, which the Office of the Director of Public Prosecutions is now prosecuting. ASIC previously banned Ms. Pearson from providing financial services in 2015.

For more information, head to the ASIC press release.

Mining company to pay $7.5 million for harming whistleblower

TerraCom Limited has been ordered to pay penalties of $7.5 million for whistleblower victimisation, following proceedings brought by ASIC. This marks ASIC's first successful enforcement action for violations of whistleblower protection laws.

The case stemmed from two ASX announcements and an open letter published by TerraCom, which claimed that allegations made by a whistleblower were false. The company later admitted that these public statements caused detriment, including hurt and humiliation, to the individual and damaged their reputation. This was despite an independent investigation partially supporting the whistleblower's claims.

In addition to the $7.5 million penalty, TerraCom was also ordered to pay ASIC's legal costs of $1 million.

ASIC proposes new rules for AI and automated trading

ASIC is looking to update its market integrity rules (MIRs) to keep up with rapid changes in technology, particularly the increasing use of artificial intelligence (AI) and automated trading systems. 

The proposed changes aim to make trading more secure and fair by applying consistent rules across securities and futures markets.

About 85% of trading in listed equities and 94% of SPI 200 futures is done by algorithms. As these systems become more complex, especially with the use of AI, they can introduce new risks, such as exacerbating market volatility or causing 'flash crashes' during periods of high stress. The complexity of AI can also make it difficult to understand a system's decisions, increasing the potential for unintended consequences.

To address these risks and reduce unnecessary complexity, ASIC's new proposals include:

• 'Kill switches': Requiring market participants to have controls that can immediately stop a trading algorithm if it's behaving erratically.
• Consistent rules: Applying a single set of rules for all trading systems, regardless of how an order is submitted.
• Simplified rules: Repealing some old or obsolete regulations to make the regulatory framework more straightforward.
• Testing and monitoring: Extending existing rules to cover the development, testing, use, and oversight of trading algorithms.

ASIC is seeking feedback from the industry on these proposed changes, with submissions due by October 22, 2025.

ASIC warns of surge in celebrity-endorsed investment scams

ASIC’s Moneysmart has issued a warning to consumers after seeing a significant increase in investment scams that use the images of well-known Australian personalities. So far this year, ASIC has shut down over 330 websites using fake celebrity endorsements (a 25 per cent jump compared to the same period in the previous year).

The scammers rely on ‘social proof’ by misusing images of trusted figures, including billionaires like Andrew ‘Twiggy’ Forrest, Gina Rinehart, and Anthony Pratt. They also use technology like AI to create convincing fake trading platforms, cloned websites, and fake news articles to lure people into fraudulent schemes.

ASIC is urging consumers to follow its stop, check, protect framework when encountering these types of investment opportunities:

• Stop and question if the celebrity is truly involved. Many have publicly stated they have no connection to these scams.
• Check if the website's URL is legitimate and verify if the financial services provider is licensed by ASIC or listed on the Moneysmart Investor Alert List.
• Protect yourself by reporting suspicious activity and knowing what steps to take if something goes wrong.

ASIC targets failing financial reports

ASIC has found that many 'grandfathered' companies are failing to lodge their financial reports, even though a 2022 law change removed their exemption. The regulator's review found that over half of these companies have not lodged their reports for the past two financial years.

ASIC Commissioner Kate O’Rourke said financial reports are vital for providing the public with important information.

Due to the widespread non-compliance, ASIC is launching a broader surveillance operation to address the issue and has warned that it will use all available enforcement tools. Companies and their auditors are advised to comply with their obligations before the surveillance concludes in early 2026.

NAB and AFSH penalised for hardship failures

The Federal Court has ordered NAB and its subsidiary, AFSH Nominees, to pay a $15.5 million penalty for failing to respond to customers experiencing financial hardship. Between 2018 and 2023, the banks failed to respond to 345 hardship applications within the legally required 21-day timeframe. 

The failure was caused by NAB staff incorrectly using a "reject" button, which meant customers received no communication. ASIC stated the penalty sends a strong message that banks must support customers, especially during times of financial stress.

For more information, head to the ASIC press release.

Directors fined for serious fundraising breaches

Two directors of Australian company Open4Sale Global, have been ordered to pay a combined penalty of $2.8 million for serious breaches of fundraising laws. 

The court found that the directors, Simeon La Barrie and Ewald Hafer, raised over $1.3 million from investors without providing legally required disclosure documents. Instead, they gave investors marketing materials with unverified claims of future revenue. 

The court also found that director Simeon La Barrie took over $1.4 million of the investor funds for his own personal use, including paying for rent and school fees. Both directors have been disqualified from managing corporations for several years.

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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.