The Australian Securities and Investments Commission (ASIC) announced this Friday that it has canceled the Australian Financial Services (AFS) license of Berndale Capital Securities Pty Ltd, a Melbourne-based over-the-counter (OTC) derivative issuer.
Not only was the firm’s license revoked, but ASIC has also banned Stavro D’Amore from providing financial services for six years. D’Amore is a former director of Berndal and was the sole responsible manager and the key person on the AFS license.
Following an administrative hearing, ASIC discovered that Berndale failed to meet the standards of the AFS license in a number of ways. This includes the company not ensuring that its representative (D’Amore) complied with financial services law, it did not have sufficient financial and human resources and the firm did not comply with the client money reporting requirements.
The Australian regulator also found that Berndale failed to have an appropriate internal dispute resolution scheme and that it didn’t lodge annual financial statements and audit reports. Overall, ASIC believes that the firm is “likely to contravene its general obligations as an AFS licensee.”
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In regards to D’Amore, ASIC was made aware that he was not adequately trained nor competent to provide financial services and was involved in license contraventions made by Berndale. As a result, the securities regulator said that he is likely to contravene a financial services law.
Commenting on the case, ASIC Commissioner Cathie Armour said: “AFS licensees must ensure that they comply with their reporting, competence and resourcing obligations. If an AFS licensee chooses to allow other entities to operate under its license, ASIC expects that the licensee will ensure that the representatives are not providing unlicensed financial services and are properly monitored. ASIC will take decisive regulatory action to address this type of misconduct to prevent investor harm.”
ASIC Extends Berndale License Until December
To make this transition period as easy as possible for clients of Berndale, the firm’s license will be valid until December 20, 2018, to allow the company to finalize the trading accounts of existing clients.
Furthermore, Berndale’s license will officially continue until May 23, 2019, in order for the firm to remain part of a dispute resolution scheme. This is so any disputes regarding the firm can be resolved with the Australian Financial Complaints Authority (AFCA) and any compensation requirements, including professional indemnity insurance, can be settled.