ASIC has successfully applied to the Federal Court of Australia for orders to appoint receivers for a former OTC derivatives issuer.
Berndale Capital Securities was an OTC derivatives financial services licence holder until November last year when ASIC cancelled its licence.
At the time, ASIC found that Berndale had failed to ensure that its representative complied with the laws, had failed to provide honest and fair financial advice, and failed to comply with client money reporting requirements, among other failings.
The commission has now appointed Rachel Burdett-Baker and Bruno Secatore of Cor Cordis to be joint receivers for Berndale Capital and its related companies, Berndale Capital Securities Management and Algoplus.
ASIC sought the appointment due to concerns over Berndale’s financial records, the adequacy of its client money reconciliation reports and that its client monies are purportedly being held outside of Australian authorised deposit-taking institutions, in breach of legal requirements.
The ASIC investigation into the companies is continuing and the receivers are required to report back to the court concerning the affairs by 31 May 2019.
ASIC commissioner Cathie Armour, at the time of cancelling Berndale’s licence, said the AFS licensees had to comply with their reporting obligations or else ASIC would take action.
“If an AFS licensee chooses to allow other entities to operate under its license, ASIC expects that the licensee will ensure that the representatives are not providing unlicensed financial services and are properly monitored.
“ASIC will take decisive regulatory action to address this type of misconduct to prevent investor harm,” she said.
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