ASIC roundup: Unlicensed services, bans, and lemon cars

The Australian Securities & Investments Commission’s latest actions and news, May 13 – 17, 2024.

Former BitConnect promoter Bigatton pleads guilty – May 17, 2024

John Louis Anthony Bigatton, former promoter of BitConnect, has pleaded guilty to one criminal charge of providing unlicensed financial services on behalf of another person – contravening section 911B(1) of the Corporations Act.

BitConnect operated as a financial service business and an online crypto platform, offering investments opportunities through its Lending Platform – which required investing in its own currency BitConnect coin. Yet, once invested, investors could not control their loans nor withdraw their investment until the expiry of the lending period.

In his role, Bigatton promoted BitConnect on multiple platforms, and provided financial product advice without holding an AFS licence.

Earlier in September 2020 he was also banned from providing financial services for seven years. A sentencing hearing will take place on July 5.

Firms restricted from issuing reduced-content prospectus – May 16, 2024

XTC Lithium Limited, My Rewards International Limited, and Range International Limited have all been restricted from issuing a reduced-content prospectus for 12 months. All three companies were found failing to lodge required financial and other reports.

With the restrictions, the companies must, during this period, issue a full prospectus if they want to raise funds from retail investors.

Former financial adviser permanently banned – May 14, 2024

Kudzanai Philip Dzawo has been permanently banned from working within financial services after dishonestly trying to persuade clients to transfer their superannuation into an account he controlled.

He was found not a fit and proper person after he:

  • made false and misleading representations to customers:
  • acted outside the authorization with his licensee;
  • did not disclose the interest he had in the investment he recommended; and
  • showed a “serious lack of honesty, integrity, judgment, trustworthiness and professionalism.”

Cancelled AFS licence for Octillion Partners – May 14, 2024

The Australian financial services (AFS) licence for Octillion Partners Pty Ltd has been cancelled after the firm was found to have been:

  • not complying with the financial services laws;
  • not ensuring that its representatives complied with set laws; and
  • not ensuring that the financial services covered by the licence were provided efficiently, honestly and fairly.

The company was also found likely to breach its obligations under s912A(1) of the Corporations Act 2001, and not a fit and proper person under s913BA(1) of the Act.

On 20 March, the company’s financial adviser Shane Allan Rose was permanently banned from working within financial services after engaging in dishonest conduct by using client funds.

Court updates

AAT upholds permanent ban on former adviser – May 14, 2024

AAT, the Administrative Appeals Tribunal, has upheld the decision to permanently ban Sean John Sweeney from working within financial services.

He was permanently banned following being convicted of fraud offences in 2022. The AAT found the permanent ban to be “appropriate as the fraud was blatant and relatively serious and occurred in the course of Mr Sweeney’s work in the financial services industry.”

ASIC news week 20

Financial reporting and auditing focus areas

The focus areas for the financial reports ending June 30, 2024 have been announced. They include:

  • asset values;
  • adequacy of provisions;
  • subsequent events; and
  • disclosures.

“The areas announced today will be the focus of our proactive financial reporting and audit surveillance program. We expect preparers, directors and auditors to pay particular attention to these focus areas in a collective effort to improve financial reporting and audit quality,” said Commissioner Kate O’Rourke.

This is the first time that superannuation trustees will be required to lodge audited financial reports for most superannuation funds with the Commission. And the second year for large proprietary companies.


Alan Kirkland.
Photo: ASIC

On may 14, Commissioner Alan Kirkland addressed conduct within the used car industry at the Consumer Rights Forum. Kirkland voiced the Commission’s concern in the area, one of ASIC’s 2024 enforcement priorities, especially about First Nations peoples in regional and remote communities who are being targeted to buy lemon cars at over-inflated prices.

“It’s one thing to be taken for a ride – but another to be stuck with a bill you can’t afford through finance that possibly shouldn’t have been provided in the first place.”

At the CA ANZ Audit Conference 2024 on May 16, Commissioner Kate O’Rourke shared an overview about ASIC’s financial reporting and audit surveillance program, and the recent actions taken in the areas.

Kate O’Rourke.
Photo: ASIC

In her speech, Rourke also addressed the “biggest changes to financial reporting and disclosure standards in recent times” – the Government’s proposed mandatory climate reporting reforms.

“While the shift to sustainable finance may constitute a once-in-a-generation transformation, the fundamental underlying principles of accuracy and transparency are not new,” she said, in line with comments in Chair Joe Longo’s recent speech.

To keep the Australian economy flourishing, Rourke said that “it needs a strong, steady foundation from which to build public trust and confidence in the integrity of our financial system,” and that ASIC is firmly committed to leveraging surveillance and enforcement actions.

New information on unsolicited consumer contact

To minimise consumer harm, the Information Sheet 282 Unsolicited contact leading to financial advice (INFO 282) has been published to bring light to how laws apply to unlicenced entities that are making unsolicited contact with consumers, and which penalties might follow.

Clearing and settlement reforms

The Government has progressed implementation of rules for competition in clearing and settlement (CS), which will empower the Commission to form rules on CS services relating to cash equities. With its new powers, ASIC will implement the 2017 Council of Financial Regulators Regulatory Expectations for Conduct in Operating Cash Equity Clearing and Settlement Services in Australia as enforceable obligations.