The Australian Securities and Investments Commission (ASIC) has banned two former NextGen Financial Group directors in relation to their refusal to give effect to Australian Financial Complaints Authority (AFCA) determinations concerning the establishment of SMSFs to buy property.
Specifically, Nicholas Duncan Jeremy Brookes and Vitorio Vincenzo Turco have been banned from controlling, or being involved in the management of, a financial services business for three years.
NextGen Financial Group had its Australian financial services (AFS) licence cancelled in February 2024 and the corporate regulator found Brookes and Turco were each linked to NextGen’s refusal, or failure, to give effect to AFCA determinations relating to complaints about the organisation’s financial services business.
One of those determinations was for $270,000 to be paid to an SMSF, initially established to purchase a residential property, but instead ended up being invested in a managed fund that was wound up, prohibiting the original real estate transaction from proceeding. The AFCA-determined sum was in relation to the client’s fund’s investment loss and interest.
The affected consumers were eventually compensated through the Compensation Scheme of Last Resort (CSLR). NextGen’s licence was cancelled after the Federal Court ordered NextGen Financial Group be wound up in insolvency in November 2023.
The ban means both directors are prohibited form controlling “whether alone or in concert with one or more other entities” an entity that carries on a financial services business.
Brookes has also been prohibited from performing any function involved in the carrying on of a financial services business, “including as an officer, manager, employee, contractor or in some other capacity”. Turco has only been banned from performing any function involved in the carrying on of a financial services business as an officer of an entity carrying on such a business.
The regulator recognised both parties have the right to appeal to the Administrative Review Tribunal for a review of the decision, but it also reminded directors of AFS licensees of their responsibilities when it comes to complying with AFCA determinations.
