ASIC has revoked the Australian financial services (AFS) licence of Lion Advantage and banned chief executive David Hickie from providing financial services for two years.
ASIC found that Lion Advantage had breached a number of obligations of a financial services licensee in contravention of the Corporations Act.
These included failure to have adequate professional indemnity (PI) insurance, failure to lodge audited financial reports or hold membership of an ASIC-approved external dispute resolution (EDR) scheme in 2007 or for the period between 31 October 2011 and 7 March 2012.
The regulator also found Hickie failed to notify ASIC of significant breaches and did not have adequate compliance measures in line with financial services laws.
“Companies have important obligations that are central to ensuring the transparency and accountability of the reporting process and must comply with their reporting requirements to ensure users of financial reports like shareholders and creditors have the information available to them to help them make informed decisions,” ASIC commissioner Greg Tanzer said.
“Licensees who fail to maintain adequate PI insurance expose retail clients to the risk that they go uncompensated in circumstances where a licensee has insufficient funds to meet client claims.
“EDR schemes are equally important as they provide consumers with alternatives to legal proceedings in respect of resolving complaints with their financial service providers.”
The cancellation of Lion’s AFS license is effective 10 August 2012. Hickie’s banning is effective from 14 August 2012.
