ASIC actions against AFS licensees - alleged transfer of client registers to avoid claimants

ASIC has three strategic priorities, and they are to ensure:

  1. confident and informed investors and financial consumers;
  2. fair and efficient financial markets; and
  3. efficient registration and licensing.

These priorities will more than likely impact the way in which ASIC monitors "gatekeepers" of the financial service system.  Gatekeepers, in the widest definition of the term, include accountants, directors, advisers, custodians, product manufacturers, research providers, market operators and participants. 

ASIC has cancelled both the Australian Financial Services ("AFS") licence and Australian Credit licence of Morrison Carr Financial Services Pty Ltd ("Morrison Carr"), and permanently banned the sole director of Morrison Carr, Mr Dennis Cardakaris, from providing financial services and engaging in credit activities.

Morrison Carr's licences were cancelled because:

ASIC Commissioner, Peter Kell, said that Morrison Carr and Mr Cardakaris did not conduct their business in a fair, honest or professional manner, which is fundamental to maintaining integrity within the sector. 

The cancellation of the Morrison Carr licenses raises a number of important points.  However, particular attention should be paid to the transfer of client registers, which ASIC saw as an attempt to avoid client claims.  The concealment or removal of property to defraud a person's creditors can have serious consequences, including criminal consequences.