Mackay Chapman January ASIC Update
In this month’s ASIC update:
- Federal Court orders ANZ to pay record $250m in penalties
- ASX faces major overhaul following inquiry findings
- RM Capital and SMSF Club fined over conflicted remuneration failures
- ASIC extends litigation funding and conditional cost scheme relief to 2029
- ASIC updates guidance on conflicts of interest in financial services
- BDO proceedings commence over alleged misleading audit reports
- Pump-and-dump scams surged during holiday period
Keep reading for more information and key details.
Federal Court orders ANZ to pay record $250m in penalties
The Federal Court has ordered ANZ to pay $250 million across four enforcement actions, the largest set of penalties ASIC has secured against one institution.
The misconduct spanned both wholesale and retail banking, including:
- Unconscionable conduct in a $14bn Commonwealth bond deal and two years of misleading reporting to the Federal Government (total $135M)
- Failure to act on hundreds of hardship notices, with some customers waiting over two years ($40M)
- Incorrect and misleading interest rate disclosures, resulting in unpaid bonus interest ($40M)
- Charging fees to deceased customers and poor handling of estates ($35M)
The Court criticised ANZ’s conduct as serious and systemic, noting the penalties are not to be treated as a mere cost of doing business.
ASIC expects ANZ to overhaul governance and non-financial risk settings and has signalled continued focus on hardship processes, product disclosures and estate management across the sector.
ASX faces major overhaul following inquiry findings
ASIC has secured a reform commitment from ASX after an interim inquiry identified serious weaknesses in governance, culture and risk management.
ASX will restructure its clearing and settlement boards to improve independence, reset its core transformation program with clearer accountability, and hold an extra $150 million in capital until remediation is complete.
ASIC and the RBA will also step up oversight. ASIC has made clear that incremental improvements are no longer acceptable, with the final report due in March 2026.
RM Capital and SMSF Club fined over conflicted remuneration failures
The Federal Court has ordered RM Capital to pay $575,000 and its authorised representative, The SMSF Club, $350,000 after finding both breached conflicted remuneration laws.
The penalties follow earlier findings that the SMSF Club accepted more than $135,000 in referral payments from a property group linked to SMSF establishment advice, in breach of the ban on benefits that could influence product recommendations.
The Court held that RM Capital failed to take reasonable steps to prevent its representative accepting those payments over a three-year period.
The judge also criticised RM Capital’s passive approach to compliance and emphasised that obligations under an AFSL are core responsibilities, not optional tasks.
ASIC again warns licensees that lax oversight of representatives creates unacceptable consumer risks, particularly where SMSF advice intersects with property schemes.
ASIC extends litigation funding and conditional cost scheme relief to 2029
ASIC has extended two key instruments that exempt certain litigation funding and conditional costs arrangements from standard credit, licensing and managed investment rules.
The relief, originally due to expire in January 2026, will now run until 31 January 2029.
The extension means litigation funders, lawyers and funded class members can continue operating under the existing framework while the Federal Government works through broader policy decisions for the sector.
The two instruments allow litigation funding and proof-of-debt arrangements to sit outside the National Credit Code, and exempt conditional cost-based funding structures from managed investment schemes and financial services licensing requirements.
This is a holding measure only: ASIC has signalled that ongoing treatment of litigation funding remains subject to Government reform priorities.
ASIC updates guidance on conflicts of interest in financial services
ASIC has issued a refreshed version of Regulatory Guide 181, updating how AFS licensees should (and are expected to) identify and manage conflicts of interest.
The previous guide dated back to 2004, and the refresh reflects two decades of legal change and ASIC’s recent surveillance activity in private markets.
ASIC stresses that conflict management is now a frontline conduct expectation, not a policy template exercise.
The new guidance emphasises:
- What constitutes a conflict within a financial services business
- That obligations apply across all services provided under a licence
- The need for tailored, embedded controls rather than generic policies
- Practical steps firms should take to manage identified conflicts
- Links to related duties across the Corporations Act
The update follows a consultation process in mid-2025, with most submissions supportive of clearer and more practical expectations.
BDO proceedings commence over alleged misleading audit reports
ASIC has launched Federal Court proceedings against BDO Audit (WA) and director Dean Just, alleging that audits of the ASX-listed Dubber Corporation over three consecutive financial years were materially false or misleading.
The regulator claims that BDO signed off that Dubber’s accounts offered a “true and fair view,” complied with auditing standards, and were supported by sufficient evidence.
In ASIC’s view, the audits failed to meet required standards and the financial reports were materially misstated. Mr Just was the lead auditor during the period.
The proceedings follow Dubber’s own discovery of a multimillion-dollar shortfall in funds it believed were held in a term deposit by a third-party trustee.
That discovery led to board-level investigations, disclosures to the market and, ultimately, litigation commenced by Dubber against BDO earlier this year seeking more than $26 million plus costs.
Pump-and-dump scams surged during holiday period
ASIC warned retail investors to be on high alert during the holiday season, following a noticeable spike in pump-and-dump schemes.
Scammers were seen exploiting thinly traded stocks and social media networks to artificially inflate prices before rapidly selling out.
The regulator says these types of schemes are increasingly coordinated, often using overseas markets, private messaging apps and even stolen celebrity identities to draw in unsuspecting traders.
ASIC also notes that some operators are also leveraging hacked brokerage accounts, differential cross-border oversight and social media targeting to hide their activity.
The warning coincides with the sentencing of four individuals involved in an Australian pump-and-dump ring, and follows similar alerts from regulators in New Zealand, the United States and the FBI, which reported a significant rise in related complaints through 2025.
According to ASIC, small-cap stocks remain the most vulnerable due to low liquidity, making them easier to manipulate and more likely to leave everyday investors with losses when the promoters exit.
The regulator reminds investors to check claims before investing and report suspected scams to Scamwatch, the ACCC, ReportCyber or the ATO.
The contents of this article and any linked articles do not constitute legal advice, are not intended to be a substitute for legal advice, and should not be relied upon as such. They are designed and intended as general information in summary form, current at publication, for general informational purposes only. You should seek legal or other professional advice concerning any particular legal matters you or your organisation may have.
