Australian Securities and Investments Commission v BT Funds Management Limited

In the case of Australian Securities and Investments Commission v BT Funds Management Limited, the Australian Securities and Investments Commission (ASIC) sought penalties against BT Funds Management Limited and Asgard Capital Management Limited for unauthorised deductions of fees from customers' accounts and misrepresentations to customers in statements of account. The unauthorised charging of adviser fees by BT and Asgard, following the removal of an adviser from a customer’s account, was occurring from August 2001. This resulted in over 660 customers being incorrectly charged over $630,000 in adviser fees. BT and Asgard retained the fees as revenue and subsequently refunded them, with interest, as part of a remediation scheme.

The legal issues that the court was required to decide included the imposition of appropriate penalties pursuant to section 12GBA of the Australian Securities and Investments Commission Act 2001 (Cth) (ASIC Act) for admitted contraventions of section 12DB(1)(g) and whether the declarations and adverse publicity orders proposed by the parties were appropriate. The court considered whether the declarations were appropriate under section 21 of the Federal Court of Australia Act 1976 (Cth) and whether they would serve to record the court’s disapproval of the contravening conduct, vindicate ASIC's claim, assist the regulator to carry out its duties, and deter other persons from contravening the provisions. The court was also required to consider the quantum of penalties contested by the parties.

The court held that declarations were an appropriate remedy in this case and that they should be made substantially in the terms proposed by the parties. The court also found that adverse publicity orders were appropriate and directed counsel for the parties to confer and to present amended draft orders for consideration. The court ordered BT Funds Management Limited and Asgard Capital Management Limited to pay pecuniary penalties of $1.5 million each, to the Commonwealth of Australia within 14 days of the order. Additionally, the defendants were ordered to take all reasonable steps to cause to be published, at their own expense, a notice in the terms set out in Annexure A to these orders, in font no less than 10 point, in a readily accessible part of the following web addresses maintained by them, and ensure that a link to the notice appears immediately upon access by a person to the home page of the websites and is maintained for 180 days from the date of these orders.

The final orders included that BT Funds Management Limited and Asgard Capital Management Limited pay the plaintiff's costs of and incidental to these proceedings. The entry of orders was dealt with in Rule 39.32 of the Federal Court Rules 2011.