ASIC Bans Two Australian Fund House CEO’s On Grounds of Mismanagement and Incompetence

Karthik Subramanian

Karthik Subramanian has been a professional trader and fund manager over the last 18 years. He is basically a software developer who made the transition to financial domain around 18 years back as the attractiveness of the financial markets proved too much for him. He lives in Chennai in India along with his wife and son. He began his career as a software developer in 1999 and then gradually moved into the financial industry as he began trading stocks in his pastime. He then moved into the financial markets full time and then shifted his focus to the FX markets due to the liquid nature of these markets. Since then, he has been trading FX diligently and his favourite pair are the EURUSD and EURJPY. Over the last couple of years, he has found blockchain to be of high interest and considering his background in software and finance, he has since assembled a team of highly talented developers who have since worked on a variety of projects like crypto exchanges and blockchain architecturing. Now, he balances his time between trading and commenting on both the FX and crypto markets. He has worked with many publications including FX Street and Finance Magnates, which has helped him gain experience and also recognition across the industry. He loves to write and this passion has helped him to reach out across the FX and crypto industry. Right now, he works on his pet projects in the FX and crypto industry and spends his time writing and managing his blockchain team and helping it to reach higher.

Ollie Roswell

ASIC Bans Two Australian Fund House CEO’s On Grounds of Mismanagement and Incompetence

April 30, 2019
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ASIC

Australia’s Finance regulatory authority ASIC (Australian Securities and Investments Commission) announced today that it had banned Jeffrey Worboys and Matthew Barnett from providing financial services for the next six years. To those familiar with the Australian fund management market, Worboys and Barnett are the current CEOs and director of Halifax Investment service private limited and former joint CEOs of Sydney based financial consultant and investment firm Australian Mutual Holdings Limited. Interestingly, Halifax Investment has gone into liquidation last November on the discovery of over AUS 210 million of clients funds being used to cover off losses incurred from bad bets in their investment products. While Barnett left the firm during February 2018, Worboys continued to remain in his position as CEO of Australian Mutual Holdings Ltd. The company holds an AFS license from ASIC for providing business related to financial service and fund management.

A company holding an AFS license must comply with business standards and requirements mentioned by ASIC. Australian Mutual Holdings Ltd is popular for financial services in both taxation and compliance services sector and providing stock trading and fund management services. In one of ASIC’s latest probe, it found that Courtenay House Capital Investment Fund – an investment scheme managed by Australian mutual holdings mostly dealing with Forex and Commodities failed to meet compliance requirements set by the financial regulatory authority. Early last year, the supreme court of New South Wales ordered the wind up of Courtenary House companies appointing Said Jahani and John Mc Inerney from Grant Thornton as liquidators for Courtenay house group of companies. This prompted a separate investigation into Courtenay House group of companies by ASIC which revealed that the forex and commodities fund of Courtenay House managed by Australian Mutual Holdings Ltd did not meet the requisite business standards and guidelines set by the regulatory body.

ASIC accused Worboys and Barnett over their lack of integrity and judgement expected from an ASIC approved financial service provider. ASIC blamed that both CEOs failed to ensure that the person responsible for trading funds had relevant experience and qualifications to handle said investment fund which shows their lack of care and diligence to act in the best interest of clients who have invested in the funds. Stating their lack of reliability and suggesting a high possibility that the two members are highly likely to breach Financial Services law in the future, ASIC has banned the two members from providing financial services for next six years. While ASIC has imposed a ban on the two members, they have a chance to appeal ASIC’s decision to the Administrative Appeals Tribunal for a review over their ban order.

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