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Thursday 3 March 2016

16-059MR ASIC bans former NAB adviser for five years

Following an investigation by ASIC and a hearing, ASIC has banned Mr Gerard McCormack of South Melbourne, Victoria, from providing financial services.

Mr McCormack was employed by National Australia Bank (NAB) during the time the misconduct for which he was banned, took place.

ASIC banned Mr McCormack after finding he contravened financial services laws.

ASIC's investigation found that between June 2013 and July 2013, Mr McCormack engaged in misleading and deceptive conduct by:

  • phoning an industry superannuation fund falsely representing that he was a member of the superannuation fund in order to obtain information on that fund member's superannuation account when not authorised to do so; 
  • witnessing his client phone and falsely represent he was the same member of the superannuation fund to gain further personal superannuation account information about, as it transpired, a third party; and
  • assisted his client complete and lodge false withdrawal forms, using the information previously obtained relating to that member's superannuation account, so that all funds were improperly transferred to his client;

ASIC Deputy Chair Peter Kell said, 'When acting on behalf of their clients, financial advisers must not engage in behaviour that is misleading or deceptive. As this case shows, conduct that breaches financial services laws will result in action by ASIC to remove them from the financial services industry.'

Mr McCormack has applied to the Administrative Appeals Tribunal (AAT) for a review of ASIC's decision*.

*On 14 December 2016, the AAT upheld an appeal by Mr McCormack to set aside ASIC's decision to ban him from providing any financial services (refer: 16-448MR).

Background

This outcome is a result of ASIC's Wealth Management Project. The Wealth Management Project was established in October 2014 with the objective of lifting standards by major financial advice providers. The Wealth Management Project focuses on the conduct of the largest financial advice firms (NAB, Westpac, CBA, ANZ, AMP and Macquarie).

ASIC's work in the Wealth Management Project covers a number of areas including:

(i) working with the largest financial advice firms to address the identification and remediation of non-compliant advice.

(ii) seeking regulatory outcomes where appropriate against Licensees and advisers. For example, as part of its Wealth Management Project ASIC has banned the following advisers from the financial services industry, in addition to Mr McCormack:

*Editor's note 1:

This media release was updated on 19 December 2016 to note the decision of the AAT to set set aside ASIC's decision to ban Mr McCormack from providing any financial services.

Editor's note 2:

On 11 January 2017, ASIC filed a Notice of Appeal against the AAT's decision (refer: 16-448MR) in the Victorian Registry of the Federal Court. The first case management hearing has been listed for 2 February 2017.

Last updated: 03/03/2016 12:00