The Australian Securities & Investments Commission (ASIC) has commenced proceedings in the Federal Court against Diversa Trustees Limited.
In a statement accounting the move, the securities regulator alleged that Diversa was aware that ASIC was investigating businesses run by now former-financial adviser Nizi Bhandari for contraventions of financial law but failed to take adequate steps to stop Mr Bhandari from putting clients into Diversa’s superannuation product.
ASIC alleged that this conduct represented a breach of Diversa’s obligation to act efficiently, honestly and fairly.
“In making payments out of a superannuation fund, trustees are expected to have processes in place to ensure the expenditure is appropriate,” the regulator said.
Between March 2019 and December 2020, ASIC said that Diversa continued to work with Mr Bhandari’s company via the OneVue company group. This, in turn, facilitated the payment of fees from the superannuation fund to Mr Bhandari.
Mr Bhandari was permanently banned from providing financial services and engaging in credit activities earlier this year.
“ASIC found that Mr Bhandari acted dishonestly while assisting consumers to find and consolidate their superannuation and obtain hardship payments,” the regulator said at the time.
This is the second such proceedings launched by ASIC against a professional super trustee in recent months, following a similar enforcement action against Tidswell in July 2021.
ASIC said that they’re seeking declarations and pecuniary penalty orders from the Federal Court.
“Poor trustee oversight practices could enable inappropriate behaviour by service providers,” the regulator warned.
