ASIC has banned Mr Mark Joseph Hinsley, of North Balgowlah, New South Wales, a director of Foster Stockbroking Pty Ltd (FSB), from providing financial services for three years.
An ASIC investigation into Mr Hinsley and FSB raised concerns regarding conduct relating to the allocation of shares in the Initial Public Offering (IPO) of Reffind Ltd (RFN) and the publication by FSB of a research report in relation to RFN on 25 September 2015 (RFN Research Report).
FSB is an Australian financial services licensee based in Sydney that provides investment banking and traditional stockbroking (including research) services to its clients. It was the Sole Lead Manager for the IPO of RFN, a small cap technology company, in July 2015. The RFN IPO was heavily over-subscribed.
Mr Hinsley was Head of Investment Banking for FSB and was principally responsible for the provision of corporate advisory services to RFN at the relevant time. Mr Hinsley was also the author of the RFN Research Report.
The ASIC investigation found:
- Mr Hinsley engaged in misleading or deceptive conduct contrary to s1041H(1) of the Corporations Act by failing to disclose to RFN that a proportion of their shares in the RFN IPO had been allocated to nominee accounts controlled by Hinsley and his fellow FSB directors;
- the RFN Research Report, authored by Mr Hinsley, contained assumptions and statements that had no reasonable grounds and as a result was misleading contrary to s1041H(1) of the Corporations Act; and
- Mr Hinsley was involved in FSB contravening its general obligations as a financial services licensee to act fairly and to have adequate arrangements to manage conflicts of interest in authoring the RFN research report.
'Licensees, their officers and employees who are appointed to manage equity raising transactions must act appropriately, comply with the law and ensure that the services provided are done so in an efficient, honest and fair manner,' said ASIC Commissioner Cathie Armour.
The banning orders for Mr Hinsley have been recorded on ASIC's publicly available Financial Advisers Register.
Background
On 24 November 2017, ASIC accepted a Court-Enforceable Undertaking from FSB over the stockbroker's capital markets and research businesses (17-404MR).
