ASIC has successfully applied to the Federal Court to make Joshua Fuoco a fourth defendant in proceedings against Wealth and Risk Management (WRM) and its related companies Yes FP and Yes FS.

ASIC alleges the defendants breached various provisions of the Corporations Act 2001 and the Australian Securities and Investments Commission Act 2001, including the best interests obligations financial advisers owe to their clients under the Future of Financial Advice provisions, and other provisions relating to misleading and deceptive conduct and unconscionable conduct.

Mr Fuoco is the owner of WRM, Yes FP and Yes FS and was the director of the three defendant companies until he was disqualified by ASIC from managing corporations for 2½ years from 13 May 2016. Mr Fuoco was also previously banned by ASIC from providing financial services for 5 years from 13 January 2010 to 12 January 2015 [refer 10-210AD and 10-06AD].

ASIC alleges that Mr Fuoco was knowingly involved or concerned in various contraventions by WRM, Yes FP and Yes FS, including that he was involved in:

• unconscionable conduct by WRM, Yes FP and Yes FS in contravention of s 12CB of the ASIC Act;
• carrying on an unlicensed financial services business by Yes FS in contravention of ss. 911A, alternatively 911B, of the Corporations Act; and
• Yes FS's misleading and deceptive representations in contravention of s 1041H of the Corporations Act and ss. 12DA and 12DB(1)(f) of the ASIC Act.

On 8 August 2017 the Court made new orders in the proceeding, including that the defendants are required to file their defence by 13 September 2017. The original trial date of 2 October 2017 has been vacated and the matter set down for trial on 1 February 2018.

Background

WRM is licensed to advise retail clients about, and deal in, life risk insurance and superannuation products. WRM has authorised advisers, generally employed by WRM’s corporate authorised representative Yes FP, to provide personal financial advice to retail clients referred to them by Yes FS, via the website yesfs.com.au.

On 8 May 2017, ASIC obtained an order which, until the trial, requires WRM, Yes FS and Yes FP to change how they engage with their clients. Further information on the injunctive orders can be found here (17-133MR).

The injunctive orders follow ASIC's commencement of proceedings on 14 March 2017 (refer: 17-069MR).

Editor's note:

This proceeding was mentioned before Justice Moshinsky on 11 December, when Mr Fuoco: (a) informed the Court that he admits each of the allegations made by ASIC in its further amended statement of claim, and (b) made an undertaking to the Court that from 22 December 2017 until the proceeding is heard and decided he would not carry on a financial services business.　

The trial date in this matter has been moved to 5 February 2018 for one day only.  Further, the second and third defendants in the proceeding, Jeca Holdings Pty Ltd and Yes FP Pty Ltd, have been placed into liquidation and will not be actively involved or represented in the proceeding.