ASIC Bans Nizi Bhandari for Dishonest Conduct

The Australian Dealer Group (ADG) and his sole director, Nizi Bhandari, were banned from the Australian financial services industry by ASIC.

The financial watchdog canceled the AFS license for acting dishonestly while assisting consumers to find and consolidate their superannuation and obtain hardship payments.

ADG and Bhandari owned the website called ‘Australian Super Finder’ which allowed Australian residents to request a search for lost superannuation and then offered to consolidate the ‘found’ superannuation.

ASIC has investigated many unlicensed companies offering these “free” services in the past as although consolidation of superannuation accounts can benefit consumers, if not done appropriately it can lead to the loss of valuable insurance and payment of higher fees.

ADG’s Bhandari was involved in multiple contraventions of financial services laws, including telling consumers to make false statements to their superannuation fund trustees in order to gain early access to their superannuation balances.

The firm prioritized its own interests over the consumers’ interests, breached the Australian Tax Office’s (ATO’s) terms and conditions when conducting lost superannuation searches, it acted without the consent or instruction of consumers; charged fees for superannuation consolidation on an ad hoc basis, without transparency, fairness or consistency; and pressured consumers into signing Superannuation Consolidation Agreements over the phone, including by not providing time to read its terms and conditions prior to seeking agreement.

ASIC claims consumers were potentially exposed to harm, including loss of insurance held through superannuation, extra fees, and ATO penalties for inappropriate access to superannuation. Mr. Bhandari and ADG can still appeal to the Administrative Appeals Tribunal.

Immunity for Criminals Assisting Law Enforcement

The Australian Securities and Investments Commission has recently announced that individuals who committed serious offenses such as market manipulation, insider trading, and dishonest conduct, would be able to seek immunity from the regulator.

The new policy will ensure whistleblowers are provided with immunity from both civil penalty and criminal proceedings despite their wrongdoings in the past. These individuals, however, will remain subject to any administrative or compensation actions that come their way.

In order to be granted immunity from civil penalty and criminal proceedings, whistleblowers will have to assist ASIC in identifying and taking enforcement action against the individuals and corporations who have breached the law.

The financial watchdog has the authority to grant civil immunity to whistleblowers, but criminal immunity falls under the scope of the Commonwealth Director of Public Prosecution (CDPP). ASIC will work with the CDPP on applications for criminal immunity for whistleblowers.

“Serious offenses” can lead to up to 15 years in prison and fines of nearly $1,000,000 or three times the benefit’s value, if determined by the court.