On 13 July 2020, following an appeal by ASIC, the Federal Court set aside a decision of the Administrative Appeals Tribunal (AAT) not to ban financial adviser Mr Robert Hutchison from providing any financial services.
The Federal Court found that the AAT had interpreted the scope of sections 1041G and 1041H of the Corporations Act too narrowly. Those sections prohibit dishonest, misleading and deceptive conduct "in relation to a financial product or financial service".
The AAT ruled that Mr Hutchison breached his contractual obligations with his licensee, RI Advice Group Pty Ltd (RI Advice), by not passing on the money he received directly from his clients to RI Advice. However, the Tribunal found that sections 1041G and 1041H did not apply to this conduct because it related only to the agreement between Mr Hutchison and RI Advice, not the financial service Mr Hutchison provided to clients.
The Court disagreed, confirming the broad scope of these prohibitions. The Court confirmed that an indirect connection between a person's dishonest or misleading conduct and a financial product or service is sufficient for the prohibitions to apply.
The matter has been remitted back to the AAT to have the matter re-determined.
Download the Federal Court's reasons for decision
Background
Mr Hutchison, of Lower Chittering, Western Australia, a former financial adviser and authorised representative of RI Advice, was permanently banned by ASIC from providing financial services on 11 June 2017 (17-188MR).
The AAT set aside ASIC's decision to ban Mr Hutchison on 18 September 2018 (18-276MR).
ASIC filed a Notice of Appeal in the Perth Registry of the Federal Court on 15 October 2018. The appeal hearing was held on 11 June 2019.
