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Civil penalty agreement for Dixon Advisory

civil penalty Dixon

Dixon Advisory and ASIC have entered into a heads of agreement to resolve the civil proceedings the regulator instigated against the financial services firm last year.

The Australian Securities and Investments Commission (ASIC) has entered into a heads of agreement to resolve civil penalty proceedings against Dixon Advisory and Superannuation Services Limited.

The conditional agreement has followed a court-ordered mediation and proposal that Dixon Advisory pay a $7.2 million penalty for its legal breaches with an additional $1 million to cover the cost of ASIC’s investigation and legal proceedings.

ASIC commenced a civil penalty proceeding in September 2020 in the Federal Court after allegations Dixon Advisory representatives breached the Corporations Act and failed to act in their clients’ best interest and provide financial advice appropriate to the clients’ circumstances.

The parent company of Dixon Advisory, E&P Financial Group, acknowledged the agreement with ASIC via an Australian Securities Exchange announcement confirming both parties consent to the court’s declaration that Dixon had violated section 961K(2) of the Corporations Act on 53 occasions in the period between 6 October 2015 to 31 May 2019.

The announcement further stated if the parties do not agree to the Final Admissions Schedule, expected around August, the heads of agreement will be terminated and the trial date for the legal proceedings of the contested matter will remain until an agreement is reached.

E&P Financial Group also took the opportunity to declare the governance shortcomings revealed by the ASIC proceedings have now been addressed.

“The board wishes to make it clear that extensive management and governance changes have occurred across the group over the last two years to ensure Dixon Advisory and Superannuation Services acts in its clients’ best interests at all times,” it said.

“The company has already commissioned its own external independent review of governance practices and implemented all resulting recommendations.”

ASIC announced it will provide further comments after the matter has been determined by the court.

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