The Australian Securities and Investments Commission (ASIC) has cancelled the Australian financial services licence (AFSL) of DOD Bookkeeping Pty Ltd following the organisation’s failure to pay a compensation determination handed down against it.
Specifically, DOD Bookkeeping, formerly trading as Equiti Financial Services Pty Ltd, failed to pay an amount of $64,860.05 as the result of a matter raised with the Australian Financial Complaints Authority (AFCA). As DOD Bookkeeping did not pay the amount due to the aggrieved party, the Compensation Scheme of Last Resort (CSLR) settled the debt on its behalf and informed ASIC of the situation.
The circumstances meant the corporate watchdog had to cancel DOD Bookkeeping’s AFSL under the law as it states where an AFCA determination is paid by the CSLR, and the government notifies ASIC of the firm that failed to pay the compensation amount, the regulator must take this action against the offending organisation.
Further, the cancellation does not merit review and is not subject to discretion.
DOD Bookkeeping is currently in liquidation.
ASIC commenced civil penalty proceedings against DOD Bookkeeping in May 2021 for alleged breaches of the rules prohibiting conflicted remuneration under the Corporations Act and a failure to provide appropriate financial advice that was in the best interest of the client.
At the time, the firm, then trading as Equiti Financial Services, was a part of a group of companies where it offered SMSF establishment and administration services, and where Equiti Property Pty Ltd and Equiti Finance Pty Ltd offered real estate and mortgage broking services respectively.
The alleged conflicted remuneration practice occurred between 26 October 2015 and 27 August 2018, whereby three adviser bonuses totalling $164,750 were paid upon the settlement of property purchases arranged by Equiti Property based on practitioner recommendations the individuals involved executed the transaction through an existing SMSF or one that was newly established.
In addition, ASIC alleged Equiti Financial Services on 12 occasions did not provide appropriate advice that was in the client’s best interest between 18 May 2015 and 13 February 2018. In these instances, clients were advised to set up an SMSF and acquire a property through the vehicle using gearing to do so.
