Zurich pays out for trauma insurance claims handling failure– May 16, 2025
Infringement notices totaling A$37,560 ($24,149) have been issued by ASIC against Zurich Australia Limited for allegedly making false or misleading statements to two policyholders about their entitlement to benefit payments.
The firm declined two trauma insurance claims on the basis that the particular medical conditions claimed for were excluded. ASIC alleges these statements were false or misleading as the policy terms applicable to the trauma cover did not exclude the medical conditions in question.
Following a quality assurance review, Zurich discovered the errors and remediated the policyholders with interest, and also reported the matter to ASIC. The infringement notices were paid on May 8, 2025.
Payment of infringement notices does not constitute admission of liability, and payment is considered a proportionate regulatory response.
Former Sydney financial adviser sentenced over dishonest conduct – May 16, 2025
David Valvo, a former financial adviser, was sentenced in the Downing Centre District Court on February 12, 2025, for engaging in dishonest conduct in the course of carrying on a financial services business, in contravention of s1041G of the Corporations Act 2001.
He dishonestly obtained A$110,000 ($70,725) from clients’ superannuation accounts between July 2019 and January 2020.
Valvo submitted ad hoc adviser fee forms for 12 clients which purported to authorize withdrawals from their accounts. The clients had no knowledge of these fees, and investigations found that Valvo had created fictitious client file notes detailing alleged conversations consenting to the withdrawals.
Valvo was convicted and sentenced to three years in prison. This was suspended upon condition that he recognized he would comply with conditions to be of good behavior for a period of five years, would pay a pecuniary penalty of A$20,000 ($12,859), and make reparatory payments to Oasis Fund Management Limited, the trustee of the Wealthtrac superannuaion fund to reimburse clients’ losses.
ASIC Deputy Chair Sarah Court said: “Instead of showing the honesty and integrity required of someone who works in the financial services sector, Mr Valvo’s actions betrayed the trust of his clients and caused them financial harm. This sentence demonstrates the seriousness of the misconduct. ASIC will continue to take action to protect the superannuation assets of consumers.”
Guilty plea in Beacon Minerals insider trading case – May 16, 2025
Darryl Brian Mapleson has entered a guilty plea to one count of insider trading in the Supreme Court of Western Australia.
Mapleson, who provided geological services to Beacon, used Rosdarem Pty Ltd and Rosdarem Investments Pty Ltd – companies he was a director of – to acquire 6,792,850 shares in Neacon Minerals between 21 and 24 january 2017 when he was in possession of inside information.
At the time of the trades, Mapleson was engaged by Beacon as its Competent Person for making announcements to the Australian Securities Exchange about drilling results. Two other charges of insider trading were discontinued, and Mapaleson will appear for sentencing on August 6,2025.
A related case saw Alexander McCulloch, a former project manager at Beacon Minerals, plead not guilty to two counts of insider trading. Trial has been provisionally listed for
Macquarie Securities sued for repeated and systemic misleading conduct – May 14, 2025
Macquarie Securities (Australia) Limited (MSAL) has been sued for allegedly engaging in misleading conduct by misreporting millions of short sales to the market operator. The alleged failures went on for over 14 years between December 2009 and February 2024, and related to at least 321 unique securities.
According to ASIC, MSAL allegedly failed to correctly report 73 million short sales, yet the Commission estimates that the volume could even be between 298 million and 1.5 billion.
ASIC alleges that MSAL contravened:
- s798H(1) of the Corporations Act 2001 – by virtue of alleged contravening the rules 2.1.3 (Supervisory Procedures), 5.5.2 (Organisational and Technical Resources) and 7.4.2 (Regulatory Data) of the ASIC Market Integrity Rules (Securities Markets) 2017;
- s912A(1)(h) – by failing to have proper risk management systems;
- s1308(5) – by presenting false or misleading documents to the market operator; and
- s12DF of the ASIC Act 2001 – by engaging in conduct which could mislead the public.
ASIC is seeking penalties and an independent review and assurance of MSAL’s regulatory reporting systems, controls and supervisory procedures.
“MSAL’s repeated systemic failure to detect and resolve these issues indicated serious neglect of its systems and disregard for operational controls and technological governance.”
Joe Longo, Chair, ASIC
This is the fourth regulatory action against Macquarie Group in a year, and it is ASIC’s first short sale reporting case. The others include:
- May 7, 2025: Additional conditions were imposed on Macquarie Bank Limited after “multiple and significant compliance failures” relating to its futures dealing business and over-the-counter derivatives trade reporting. Some of the failures went undetected for many years, including one that went on for a decade.
- September 25, 2024: Macquarie Bank Limited was fined a record A$4.995m ($3.4m) by the Markets Disciplinary Panel for breaching market integrity rules in its role of market gatekeeper when failing to prevent suspicious orders being placed by three clients on the electricity futures market on 50 different occasions between January and September 2022.
- April 19, 2024: Macquarie Bank Ltd was ordered to pay a A$10m ($6.4m) penalty for failing to properly monitor systems for third-party fee withdrawals from customer accounts.
MSAL was also in June 2019 fined A$300,000 ($194,268) for failing to correctly report Regulatory Data for approximately 42 million orders or trade reports to the relevant market operators.
Court updates
Tim Xenos sentenced after using company funds for personal use – May 13, 2025
Former coconut water beverage CEO Tim Xenos has been sentenced to 18 months’ imprisonment to be served by way of an Intensive Corrections Order after using company funds to pay for private legal and bankruptcy expenses.
Xenos, also known as Efthymios Xenos, was on February 27 found guilty of managing a company while being disqualified – violating section 206A(1)(a) of the Corporations Act 2001 (Cth).
He was also found violating section 184(2) by dishonestly using his position to gain a financial advantage of about A$111,392 ($71,466). Xenos also breached section 265(1)(ca) of the Bankruptcy Act 1966 (Cth) by deliberately not disclosing his income and bank accounts to his bankruptcy trustee.
With the conviction, Xenos is also disqualified from managing companies for five years, and ordered to 200 hours of community service work as part of the Intensive Corrections Order.
Cancelled AFS licences
Thistle Financial Group Pty Ltd – May 13, 2025
The Australian financial services licence has been cancelled of Thistle Financial Group Pty Ltd due to it stopped carry on a financial services business.
SME Crowdfunder Pty Ltd – May 16, 2025
SME Crowdfunder Pty Ltd (SME) has had its AFS licence cancelled.
ASIC news week 20
2024 Gender Pay Gap Employer Statement
According to new data from ASIC, the gender pay gap has slightly decreased from 6.1% in 2022 to 5.7% as of December 31, 2023.
ASIC says that it is “committed to reducing the gender pay gap and driving lasting change in gender equality.”
The average gender pay gap in Australia is 21.8%.
ASIC workforce gender profile 2019 to 2024:
| Year | Male employees | Female employees | Total employees |
|---|---|---|---|
| 2019 | 42% | 58% | 2,089 |
| 2020 | 43% | 57% | 2,267 |
| 2021 | 44% | 56% | 2,077 |
| 2022 | 43% | 57% | 1,964 |
| 2023 | 43% | 57% | 1,774 |
| 2024 | 44% | 56% | 2,078 |
Proposal to remake financial advice-related legislative instruments
ASIC is proposing to remake three legislative instruments that are due to sunset on October 1 into one joint instrument, and extend its operational period for five years.
The legislative instruments are:
- 2015/539 ASIC Corporations (Advertising by Product Issuers);
- 2015/540 ASIC Corporations (General Advice Warning); and
- 2015/541 ASIC Corporations (Financial Services Guides).
“We have assessed that these legislative instruments are operating effectively and continue to form a necessary and useful part of the legislative framework,” ASIC said.
The proposal includes to let the content of these instruments remain largely unchanged aside from minor changes. Feedback can be submitted until June 12, 2025.
Reminder of obligations to manage company money and assets appropriately
Small business company directors need to manage company funds and assets in the best interests of their company, ASIC is reminding directors. The reminder follows earlier actions on company directors such as:
- The NSW director Vickie Anne Vella was charged on February 7 with two offences of dishonestly using her position as a director to gain personal advantage; and
- Tim Xenos, former CEO and director of FAL Healthy Beverages Pty Ltd (see above).
“Misuse of company money and assets for personal gain can lead to companies being unable to pay their debts, which can harm other small businesses who are creditors,” ASIC says.
Between 2023-24, a total of 36% of all failed companies were related to poor financial control. The Commission also says that it will continue to take action to those directors that breach their obligations by misusing assets, “especially when those breaches cause harm to other small businesses.”
Proposal to remake incidental retail cover legislative instrument
ASIC is asking for feedback on a proposal it has put forward to remake legislation that exempts insurers and brokers from specific retail client obligations when cover is provided in business insurance contracts.
The instrument concerned is the ASIC Corporations (Incidental Retail Cover) Instrument 2022/716, which provides exemptions under Chapter 7 of the Corporations Act 2001 and is scheduled to end on August 16,2025.
The relief was granted to prevent retail client compliance costs being passed on to businesses, and ASIC reckons it is generally working effectively and efficiently. So it is proposing to remake the instrument for five years, and intends to monitor its operation.
