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Court dismisses ASIC case against super trustee

By Reporter
2 minute read

The regulator has indicated that it is carefully reviewing the judgment.

On Tuesday, the Federal Court found that superannuation trustee Diversa Trustees did not fail to act efficiently, honestly, and fairly or fail to take reasonable steps to ensure its representatives complied with financial services laws.

The Australian Securities and Investments Commission (ASIC) originally commenced proceedings in the Federal Court against Diversa in October 2021.

The regulator alleged that Diversa contravened the law by allowing Australian Super Finder, the Australian Dealer Group (ADG), and financial adviser Nizi Bhandari to sign consumers up to its YourChoice Super product between 13 March 2019 and 18 December 2020.

ASIC alleged Diversa and the OneVue Group, which provided many day-to-day functions for the YourChoice Super fund, knew or should have known that the Australian Super Finder business was engaging in concerning behaviour and was at risk of breaking the law.

OneVue allegedly paid approximately $7.5 million in commissions on behalf of Diversa.

“ASIC pursued this case as part of our focus on trustee oversight of advice, which, if not done properly, can enable inappropriate behaviour by service providers and others,” commented ASIC deputy chair Sarah Court.

“ASIC will continue to work with superannuation trustees emphasising the importance of risk management when dealing with third-party providers and others.”

The regulator indicated that it is carefully reviewing the judgment.

ADG had operated the website Australian Super Finder via which consumers could request a search for lost super. ADG offered to consolidate “found” super into a single fund.

Mr Bhandari was permanently banned from providing financial services and engaging in credit activities by ASIC in March 2021.

The regulator found that Mr Bhandari acted dishonestly while assisting consumers to find and consolidate their superannuation and obtain hardship payments.

ASIC found that, because of ADG and Mr Bhandari’s conduct, consumers paid financial advice fees and were potentially exposed to harm, including loss of insurance held through superannuation, extra fees, and ATO penalties.

Mr Bhandari is also facing criminal charges in the Magistrates’ Court of Victoria.