Australian Securities and Investments Commission v La Trobe Financial Asset Management Ltd

The Australian Securities and Investments Commission (ASIC) filed proceedings against La Trobe Financial Asset Management Ltd (La Trobe), alleging that La Trobe contravened the Australian Securities and Investments Commission Act 2001 (Cth) (ASIC Act) and the Corporations Act 2010 (Cth) (Corporations Act). Specifically, ASIC claimed that La Trobe had made misleading representations regarding the terms and conditions of certain investment options offered to consumers. The Federal Court of Australia was tasked with determining the appropriate relief to be granted in light of the admissions made by La Trobe.

The primary legal issues that the Court needed to decide were whether the proposed quantum of the pecuniary penalty was appropriate and whether the form of the declarations sought by ASIC was suitable. The Court also had to consider the maximum pecuniary penalties applicable to La Trobe's contraventions of the ASIC Act and Corporations Act. The Court noted that the parties had agreed on the facts and the relief sought, but the Court still had to exercise its discretion in determining the appropriate penalty and form of declarations.

The Court found that the maximum pecuniary penalty for a contravention of s 12DB(1) of the ASIC Act in the period following 13 March 2019 was in excess of $15 million. However, the Court accepted the parties' submission that there was no meaningful overall maximum penalty given the potential number of individual contraventions and the time over which they occurred. The Court also considered that the declarations sought by ASIC were appropriate and should be granted.

The Court ordered that La Trobe pay to the Commonwealth of Australia an aggregate pecuniary penalty in the amount of $750,000 in respect of the contraventions of s 12DB(1) of the ASIC Act. Additionally, La Trobe was ordered to pay ASIC's costs of the proceeding, fixed in the sum of $120,000, and the proceedings were otherwise dismissed. The Court's decision was based on the admissions made by La Trobe, the agreed facts, and the considerations outlined above.