Federal Court imposes $11 million penalty on financial services provider for conflicted remuneration breaches (Australian Securities and Investments Commission v DOD Bookkeeping Pty Ltd (in liq), in the matter of DOD Bookkeeping Pty Ltd (in liq) (No 2) [2025] FCA 395)
Date: 28 April 2025
Court: Federal Court of Australia
Judge(s): Goodman J
Judgment date: 24 April 2025
Catchwords: CORPORATIONS – best interests obligations in Division 2 of Part 7.7A of the Corporations Act 2001 (Cth) – advice given to clients without adequate consideration of the interests of those clients – contraventions of s 961K of the Corporations Act established
Abstract:
DOD Bookkeeping Pty Ltd (formerly Equiti Financial Services Pty Ltd) advised clients to establish self-managed superannuation funds SMSFs and purchase properties sold by a related entity without proper inquiry into their circumstances. The Federal Court found Equiti FS had breached best interests obligations in Pt 7.7A of the Corporations Act 2001 (Cth) (Corporations Act) and paid conflicted remuneration to advisers. Goodman J held the misconduct was deliberate and systemic, prioritising property sales over clients' interests.
Background
DOD Bookkeeping Pty Ltd operated an integrated business model through related entities: Equiti FS provided financial advice, Equiti Property Pty Ltd marketed residential properties...