ASIC roundup: A$10m fine for monitoring failures, changes to executive leadership team

The Australian Securities & Investments Commission’s latest actions and news, April 15 – 19, 2024.

QLD construction director disqualified for five years – April 18, 2024

Miroslav Jack Samardzija has been disqualified from managing corporations for five years due to conduct and flagrant disregard for his director’s duties in the failing of three companies.

Between September 2019 and May 2021, Samardzija was the director or officer of Caboolture Developments Pty Ltd A.C.N., Sinopacific Constructions Pty Ltd A.C.N., and Land Invest Pty Ltd A.C.N, which all entered liquidation.

The Commission thought that Samardzija should be restrained from being a director after he was found using “corporate structure to his own ends and acted dishonestly”, when he failed to:

  • comply with statutory obligations to lodge tax returns for Caboolture Developments;
  • provide the books and records for Caboolture Developments and Sinopacific Construction to the liquidator; and
  • behave honestly while managing Caboolture Developments when he claimed GST refunds by using false invoices and bank statements, and transferred company funds to the benefit of other companies or related parties.

At the time of ASIC’s decision, the three companies owed a combined total of A$2,344,867.80 ($1,512,442) to unsecured creditors, including around A$1,031,522 ($665,333) to the Australian Taxation Office.

Samardzija was previously convicted and fined A$2,000 ($1,290) plus costs in March 2022 for breaching sections 475(2) and 530A(1) of the Corporations Act 2001 (Cth) for failing to submit reports and books and records to the liquidator for Sinopacific Constructions. He was then fined a further A$2,000 plus costs in September 2022 for breaching s530(1) again, for failing to provide the books and records for Caboolture Developments to the liquidator.

Court updates

Macquarie Bank to pay A$10m penalty – April 19, 2024

Macquarie Bank Ltd has been ordered to pay a A$10m ($6.4m) penalty for failing to properly monitor systems for third-party fee withdrawals from customer accounts.

The bank was found not to have proper controls to prevent and detect unauthorized fee transactions made by third parties such as financial advisers, stockbrokers and accountants – who could transact on customer cash management accounts using the bank’s bulk transacting facility, and make multiple withdrawals across multiple accounts simultaneously.

Between October 2016 and October 2019, the advisor Ross Hopkins was found to have made 167 unauthorized transactions on 13 of his client’s cash management accounts via Macquarie’s bulk transaction system, totalling A$2.9m ($1.9m). He was later sentenced to six years’ imprisonment, and has been permanently banned from providing/controlling/or carrying on any financial services business.

Macquarie has admitted to the failings, and has implemented effective controls since January 2020.

“Financial adviser Ross Hopkins was able to fraudulently withdraw around A$2.9 million from his customers’ accounts without being detected by Macquarie.”

Joe Longo, Chair, ASIC

ASIC appeals Court dismiss on Auto & General – April 19, 2024

Following the Federal Court’s decision to dismiss proceedings against Auto & General Insurance Company Limited in March, ASIC has now decided to appeal the verdict. The Commission still alleges that the company has a policy term that contravenes the ASIC Act, and has concern that the company:

  • imposes an unclear obligation on policyholders regarding what they need to disclose;  
  • has a wider right to refuse claims or reduce the payable amount if the policyholders do not meet the notification obligation than is otherwise available to Auto & General under the Insurance Contracts Act; and  
  • could mislead or confuse the policyholders with the contract’s obligations and rights.

Adam Blumenthal to pay A$850,000 and disqualified for five years – April 17, 2024

Adam Blumenthal, former director of EverBlu Capital Pty Ltd and Creso Pharma Limited (now Melodiol Global Health Limited), has been ordered to pay a penalty of A$850,000 and to be disqualified from managing corporations for five years following market rigging and breaching directors’ duties.

The Federal Court found Blumenthal had been engaging in market rigging on 14 occasions in relation to the placing of orders for EverBlu customers to purchase shares in ASX-listed Creso. He was also found breaching his director’s duties regarding:

  • EverBlu – when failing to comply with compliance policies, plus causing it to breach its AFS licensee obligations which jeopardised its interests;
  • Creso – when paying the EverBlu client Tyson Scholz more than A$2m ($1.3m) and another EverBlu client A$1.2m ($772,563) to provide marketing and promotional services for the company without sufficient due diligence or imposing measurable deliverables; and
  • Creso – when failing to avoid and disclose to the board about a conflict of interest where Blumenthal’s private company, Anglo Menda Pty Ltd, had lent more than A$7m ($4.7m) to Scholz to fund his trading in Creso shares.

Blumenthal has also been ordered to pay A$100,000 ($64,379) towards ASIC’s costs of the proceeding.

He has admitted to have breached sections 1041B(1)(b), 180(1) and 181(1)(a) of the Corporations Act 2001.

ASIC news week 16

Changes to the Executive Leadership Team

ASIC has made some changes to its senior executive leadership team, which include:  

  • Chief Executive Officer – CEO Warren Day will join the Commonwealth Director of Public Prosecutions (CDPP) on secondment as the Director’s Executive Officer on June 1, 2024. “Warren has been a significant contributor to ASIC for more than 20 years across virtually every part of ASIC’s remit. This is an opportunity for him to bring the skills and experience he has gained at ASIC to an agency we have a shared interest in supporting and seeing succeed,” said Chair Joe Longo.
  • Regulation and Supervision – Executive Director of Regulation and Supervision Greg Yanco will be appointed as Interim CEO on June 1, 2024. He was previously Executive Director Markets January 2019-June 2023, and is expecting to retire in mid-2025. Searching for a permanent CEO will begin in early 2025.
  • Enforcement and Compliance – Executive Director of Enforcement and Compliance Tim Mullaly has also said he will be retiring at the end of July 2024.  Mullaly has worked more 25 years at ASIC, and was a critical figure in implementing the new E&C structure at ASIC, overseeing a team of 450 staff focused on delivery of enforcement and compliance outcomes.

The Commission’s executive leadership team is also being strengthened with a new Executive Director role for Registry and Intelligence, and a Chief People and Culture Transformation Officer.

Joanne Harper was also recently appointed as Executive Director for Data, Digital and Technology.

More companies failing

ASIC’s latest insolvency data for July 2023-March 2024 reveals an increasing number of companies are failing, with a total of 7,742 that entered external administration. That is a 36.2% increase on the period ending March 2023.

Of the total companies, most external administrations were found within construction (2,142), and accommodation and food services industries (1,174).  

The insolvency data also showed that restructuring (878) and court liquidation appointments (1,593) increased by 294.6% and 218.8% respectively.

With only one quarter left in ASIC’s financial year, the Commission expects that the total number of external administrations by June 30, 2024 will exceed 10,000 – a level not seen since the 2012–2013 financial year.


In a keynote speech at the University of Melbourne Centre for Artificial Intelligence and Digital Ethics, Chair Joe Longo spoke about technology in the professional toolkit, and how law and technology are operating together.

“If we look closely at the practice of law, we can see that law and technology have a long history of working together – as lawyers exercise judgment and employ critical thinking to adapt to technology’s developments and advances,” Longo said and referred to copyright law from the printing press, to peer-to-peer networks, and through to large language models.

He said that one must be careful with technology like generative AI, yet not afraid of it.

“In my view, technology is a necessary tool in a lawyer’s toolkit – but it’s not the only one. To put it in a nutshell: the more technology advances, the more it shows that lawyers are going to be with us for some time yet.”