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21-171MR ASIC obtains orders against Alliance Insurance Broking Services
This media release was amended on 16 July 2021 to clarify that the appointments referred to in the media release were made by Alliance Insurance Broking Services Pty Ltd (AIBS) as a result of an undertaking provided by AIBS to the Court. The orders that were made by the Court included that AIBS file evidence of the appointments and other matters, including the receipt of $5 million which AIBS has now filed.
On 14 May 2021, ASIC obtained urgent interim orders in the Federal Court against Alliance Insurance Broking Services Pty Ltd (AIBS) and its sole director Renato De Maria (the defendants).
ASIC obtained urgent interim orders to:
- restrain the defendants from removing or permitting funds to be removed from five AIBS bank accounts and one personal account held by Mr De Maria; and
- restrain the defendants from disposing of and/or diminishing the value of any property or assets held by, or in the names of, the defendants.
The defendants consented to the interim asset freezing orders, which allowed AIBS to otherwise continue its ordinary business.
In support of its application for the interim orders, ASIC alleged that Mr De Maria caused substantial client money held by AIBS to be improperly paid into a bank account for his own personal benefit.
As an Australian financial services licence holder dealing in financial products, AIBS is required to hold client money in trust.
On 26 May 2021, ASIC made a further application in the Federal Court seeking the appointment of provisional liquidators to AIBS. ASIC’s application was opposed by AIBS.
On 30 June 2021, AIBS provided undertakings to the Court. ASIC and AIBS agreed to orders, which were endorsed by the Court.
The undertakings AIBS gave to the Court included that AIBS would:
- appoint an independent sales agent to sell the business operated by AIBS by either 30 August 2021 or a different date set by the Court;
- appoint John Lindholm, registered liquidator, as Investigative Accountant to inquire into and report to the Court and to ASIC as to the affairs of AIBS, and to monitor transactions made by AIBS on all of its bank accounts; and
- instruct the Investigative Accountant to provide a report to the Court that identifies AIBS’s assets and liabilities, reconciles client money, reconciles other business accounts to identify any improper transfers of business funds, and reports on the suspected contraventions of the Corporations Act and any suspected breaches of fiduciary or other equitable duties by AIBS, its director, its employees and/or its agents outlined in ASIC's evidence.
The Court ordered AIBS to file evidence that it had made the appointments referred to above and in relation to other matters, including that AIBS had received $5 million into its trust account from Lygon Finance Pty Ltd. That evidence has now been filed with the Court by AIBS.
The other terms of the undertaking and Court orders can be read at the link below.
The application filed by ASIC on 26 May 2021 has been adjourned.
ASIC’s application for these orders was made to preserve assets for the benefit and protection of AIBS’s insured clients and insurance providers.
Any AIBS clients who have concerns about their policies should contact their insurance provider directly.
ASIC’s investigation into the defendants is ongoing. It does not relate to or affect other financial advisers or corporate authorised representatives who may also provide insurance services offered by AIBS.