KARAMIAN and AUSTRALIAN SECURITIES AND INVESTMENTS COMMISSION - [2024] AATA 2006

KARAMIAN and AUSTRALIAN SECURITIES AND INVESTMENTS COMMISSION [2024] AATA 2006 (25 June 2024)
Division:Taxation and Commercial Division
File Number(s):2023/2048
Re:TADEH KARAMIAN
APPLICANT

AndAUSTRALIAN SECURITIES AND INVESTMENTS COMMISSION
RESPONDENT

DECISION

Tribunal:The Hon Justice Kyrou, President
Date:25 June 2024
Place:Melbourne

Pursuant to s 43(1)(b) of the Administrative Appeals Tribunal Act 1975, the Tribunal varies the decision under review by substituting ‘for 7 years commencing on 9 March 2023’ for ‘permanently’ and ‘one or more’ for ‘one of more’.
.....................................[SGD]...................................
Justice Kyrou
Catchwords

CORPORATIONS LAW – banning order – financial services adviser – falsification of exam result – misleading colleagues, clients and ASIC – providing personal advice to retail clients when not authorised to do so for nearly nine months – deliberate dishonesty.

CORPORATIONS LAW – banning order – applicant had lengthy prior good record – misconduct affected by mental illness but nonetheless deliberate and motivated predominantly by self-interest – no financial loss to clients – extensive favourable character evidence – remorse and contrition – low risk of similar dishonest conduct in future – lack of insight into nature and gravity of misconduct at time of hearing.

CORPORATIONS LAW – power to make banning order enlivened by findings that there is reason to believe that applicant not a fit and proper person and not adequately trained and not competent – concessions of breaches of financial services laws – order banning applicant from providing financial services and acting as an officer or controller of a financial services business for seven years.

CORPORATIONS LAW – principles relating to making of banning order and its scope and duration – meaning of ‘reason to believe’, ‘fit and proper person’, ‘adequately trained’ and ‘competent’ – weight to be given to character evidence.

PRACTICE AND PROCEDURE – government policies – when should Tribunal apply government policies – whether Tribunal required to apply ASIC’s Regulatory Guide 98.

COMPARABLE CASES – extent to which prior cases with some similar features can assist Tribunal in making correct or preferable decision.

Legislation
Australian Securities and Investments Commission Act 2001
Corporations Act 2001
Cases
Australian Broadcasting Tribunal v Bond (1990) 170 CLR 321
Power v Hamond [2006] VSCA 25
Rich v ASIC (2004) 220 CLR 129
Tarrant v ASIC (2013) 62 AAR 192; [2013] AATA 926
Secondary Materials

Regulatory Guide 98, ASIC’s powers to suspend, cancel and vary AFS licences and make banning orders, November 2022.

Table of Contents
Decision
REASONS FOR DECISION
INTRODUCTION AND SUMMARY
KEY STATUTORY PROVISIONS
Overview of key statutory provisions
Provisions relating to banning orders
Provisions relating to ‘relevant providers’ and ‘existing providers’
NON-CONTENTIOUS FACTS AND PROCEDURAL HISTORY
Evidence adduced by the parties
Applicant’s qualifications, experience and roles within Bluepoint
Alteration of the Exam Statement on 10 December 2021
Applicant’s conduct between 10 December 2021 and 16 May 2022
Provision of falsified Exam Statement to ASIC on 17 and 18 May 2022
Applicant’s conduct between 19 May and 29 August 2022
Events after 29 August 2022
EVIDENCE
Evidence of Mr Bates
Evidence of the applicant
The applicant’s evidence by affidavit and orally
Findings on the applicant’s credibility and the reliability of his evidence

Reports of Mr Borenstein
Evidence of character witnesses
WHICH STATUTORY SOURCES OF POWER FOR A BANNING ORDER ARE ENGAGED?
RELEVANT LEGAL PRINCIPLES
Purpose of, and factors relevant to making, banning orders
‘Has reason to believe’ criterion in s 920A(1) of the Corporations Act
SECTION 920A(1)(d) – FIT AND PROPER PERSON
Parties’ submissions
Findings of fact and conclusion on the fit and proper person issue
SECTION 920A(1)(da) – ADEQUATELY TRAINED AND COMPETENT
SECTION 920A(1)(e) – BREACHES OF FINANCIAL SERVICES LAWS
Statutory provisions relevant to s 920A(1)(e)
Parties’ submissions and conclusion
SCOPE OF THE BANNING ORDER
DURATION OF THE BANNING ORDER
ASIC’S REGULATORY GUIDE 98
CONCLUSION
DECISION
REASONS FOR DECISION
INTRODUCTION AND SUMMARY

The applicant was a financial adviser from July 2003 until 9 March 2023. During that period, he worked for Bluepoint Consulting Pty Ltd (‘Bluepoint’), which prior to 2004 was known as BTR Financial Services Pty Ltd. In 2010, he acted in the roles of managing director, responsible manager and senior investment adviser.
On 1 January 2019, changes to legislation established professional standards which required financial advisers to pass a Financial Advisers Exam (‘Exam’) before 1 January 2022 in order to continue to be authorised to provide personal advice to retail clients. Financial advisers who had not passed the Exam by 1 January 2022 were prohibited from providing personal advice to such clients from that date. However, any financial adviser who sat for and failed the Exam at least twice before 1 January 2022 was granted an extension until 1 October 2022 to pass the Exam.
On 13 November 2021, the applicant sat for the Exam for the first and only time. On 10 December 2021, he became aware that he had failed the Exam when he received a two page statement of results document (‘Exam Statement’), after being notified by email that the results were accessible. The applicant then downloaded the Exam Statement and typed the word ‘Pass’ over the word ‘Fail’ on page 1 of that statement. He then emailed to Tony Bates, who was also a responsible manager of Bluepoint, a screenshot of page 1 of the falsified Exam Statement. Mr Bates updated the Financial Advisers Register (‘FAR’) kept by the respondent (‘ASIC’) to reflect a ‘Pass’ result for the applicant.
After 1 January 2022, the applicant provided advice to 11 retail clients of Bluepoint, even though he was not legally authorised to do so.
On 17 May 2022, ASIC sent a letter to Bluepoint by email addressed to the applicant stating that he was incorrectly listed as a current financial adviser on the FAR, when his authorisation had ceased as a result of not passing the Exam by 1 January 2022. On that day, the applicant forwarded a screenshot of the falsified Exam Statement to Mr Bates, who then sent it to ASIC in response to ASIC’s letter.
After the applicant was notified by ASIC on 24 August 2022 that he was being investigated, on 29 August 2022 he admitted to Mr Bates that he had falsified the Exam Statement.
The applicant was removed as a current adviser on the FAR on 8 September 2022. However, he continued to advise non-retail clients (‘wholesale clients’), as he was entitled to do.
On 7 March 2023, a delegate of ASIC made a decision (‘Delegate’s Decision’) to issue a banning order in the terms set out below (‘Banning Order’), which took effect on 9 March 2023 when the applicant received it:
ORDER UNDER SECTIONS 920A AND 920B OF THE CORPORATIONS ACT 2001
TAKE NOTICE that, under s920A(1) and s920B of the Corporations Act 2001, the Australian Securities and Investments Commission prohibits Tadeh KARAMIAN permanently from:
i.providing any financial services;
ii.performing one of more functions as an officer of an entity that carries on a financial services business; and
iii.controlling, whether alone or in concert with one or more entities, an entity that carries on a financial services business.[1]
[1] Paragraph ii of the Banning Order erroneously refers to ‘one of more’ instead of ‘one or more’.
The Delegate’s Decision stated that the delegate relied upon paras 920A(1)(d) and (da) of the Corporations Act 2001 in making the Banning Order. In broad terms, those paragraphs empower ASIC to make a banning order where ASIC ‘has reason to believe’ that a person is not a fit and proper person to provide financial services or is not adequately trained, or is not competent, to do so.[2]
[2] Sections 920A(1) and 920B are set out below.
The applicant has applied to the Tribunal for review of the Delegate’s Decision.
For the reasons that follow, the Delegate’s Decision will be varied by substituting ‘for 7 years commencing on 9 March 2023’ for ‘permanently’ and ‘one or more’ for ‘one of more’.

KEY STATUTORY PROVISIONS
Overview of key statutory provisions

Some provisions of the Corporations Act and the Australian Securities and Investments Commission Act 2001 (‘ASIC Act’) are relevant to the determination of this matter.
Chapter 7 of the Corporations Act (ss 760A to 1101J) contains provisions relating to the regulation of financial advisers. The object of that Chapter is set out in s 760A as follows:
760A Object of Chapter
The main object of this Chapter is to promote:
(a)confident and informed decision making by consumers of financial products and services …; and
(aa)the provision of suitable financial products to consumers of financial products; and
(b)fairness, honesty and professionalism by those who provide financial services; …
The objects of the ASIC Act are set out in s 1 of that Act relevantly as follows:
1Objects
(1)The objects of this Act are:
(a)to provide for [ASIC] which will administer such laws of the Commonwealth, a State or a Territory as confer functions and powers under those laws on ASIC; …
(2)In performing its functions and exercising its powers, ASIC must strive to:
(a)maintain, facilitate and improve the performance of the financial system and the entities within that system in the interests of commercial certainty, reducing business costs, and the efficiency and development of the economy; and
(b)promote the confident and informed participation of investors and consumers in the financial system; …
It is readily apparent that both the Corporations Act and the ASIC Act seek to promote the confident and informed participation of investors in the financial system.

Provisions relating to banning orders

Section 920A of the Corporations Act relevantly provides as follows:
920AASIC’s power to make a banning order
Making a banning order
(1)ASIC may, in writing, make one or more orders (banning orders) against a person if:
…
(d)ASIC has reason to believe that the person is not a fit and proper person to:
(i)     provide one or more financial services; or
(ii)     perform one or more functions as an officer of an entity that carries on a financial services business; or
(iii)     control an entity that carries on a financial services business; or
(da)ASIC has reason to believe that the person is not adequately trained, or is not competent, to:
(i)     provide one or more financial services; or
(ii)     perform one or more functions as an officer of an entity that carries on a financial services business; or
(iii)     control an entity that carries on a financial services business; or
…
(e)the person has not complied with a financial services law (other than subsection 921E(3) (relevant providers to comply with the Code of Ethics)); or …
(1AA)Subsection (1) has effect subject to subsection (2).
When a person is not a fit and proper person
(1A)For the purposes of paragraph (1)(d), ASIC must have regard to the matters in section 913BB.
When a person contravenes a financial services law
(1B)To avoid doubt, a person contravenes a financial services law if a person fails to comply with a duty imposed under that law, even if the provision imposing the duty is not an offence provision or a civil penalty provision.
Section 913BB of the Corporations Act relevantly provides:
913BBFit and proper person test – matters to which ASIC must have regard
(1)ASIC must have regard to the matters set out in subsection (2) … for the purposes of applying any of the following provisions to a person:
…
(b)paragraph 920A(1)(d).
…
(2)The matters are as follows:
…
(c)if the person is an individual – whether the person has ever been disqualified under this Act, or any other law of the Commonwealth or of a State or Territory, from managing corporations;
…
(h)whether in the last 10 years, the person has been convicted of an offence;
…
(k)any other matter ASIC considers relevant.
‘Financial services law’ is relevantly defined in s 761A of the Corporations Act to mean:
(a)a provision of … Chapter [7] or of Chapter 5C, 5D, 6, 6A, 6B, 6C, 6D, 8A or 8B; or
(b)a provision of Chapter 9 as it applies in relation to a provision referred to in paragraph (a); or
…
(c)a provision of Division 2 of Part 2 of the ASIC Act; or
(d)any other Commonwealth, State or Territory legislation that covers conduct relating to the provision of financial services (whether or not it also covers other conduct), but only in so far as it covers conduct relating to the provision of financial services; …
Section 920B of the Corporations Act relevantly provides:
920BWhat a banning order prohibits
(1)A banning order made against a person may specify that the person is prohibited from doing one or more of the following:
(a)providing any financial services;
(b)providing specified financial services in specified circumstances or capacities;
(c)controlling, whether alone or in concert with one or more other entities, an entity that carries on a financial services business;
(d)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);
(e)performing specified functions involved in the carrying on of a financial services business.
(2)The banning order may specify that a particular prohibition specified in the order applies against the person …
(b)… either permanently or for a specified period.
…
(3)A banning order may include a provision allowing the person against whom it was made, subject to any specified conditions:
(a)to do specified acts; or
(b)to do specified acts in specified circumstances;
that the order would otherwise prohibit them from doing.

Provisions relating to ‘relevant providers’ and ‘existing providers’

As at December 2021, the applicant was a ‘relevant provider’ as defined in s 910A of the Corporations Act and was authorised to provide personal advice to retail clients in relation to relevant financial products. He was also then an ‘existing provider’ as defined in s 1546A by virtue of being a relevant provider.
Under sub-ss 1684D(1), (5) and (7) of the Corporations Act, existing providers ceased to be relevant providers (and thus ceased to be authorised to provide personal advice to retail clients in relation to relevant financial products) if they did not meet the education and training standards set out in s 921B (including the requirement to pass the Exam) by 1 January 2022.
Existing providers who ceased to be relevant providers on 1 January 2022 because they failed the Exam – as was the case with the applicant – could become relevant providers after that date if they meet the education and training standard which requires a person to have:
(a)a bachelor’s degree or higher degree, approved by the Minister;[3]
(b)passed the Exam;[4] and
(c)undertaken at least 1 year of work and training, supervised by somebody who has at least 2 years’ experience working as a relevant provider.[5]
[3]           Corporations Act, s 921B(2); Corporations (Relevant Providers Degrees, Qualifications and Courses Standard) Determination 2021.
[4]           Corporations Act, s 921B(3).
[5]           Corporations Act, s 921B(4); Corporations (Work and Training Professional Year Standard) Determination 2018.

NON-CONTENTIOUS FACTS AND PROCEDURAL HISTORY
Evidence adduced by the parties

The applicant and Mr Bates gave oral evidence and were cross-examined. In addition, the applicant relied upon the following evidence:
(a)the applicant’s affidavits sworn on 30 August 2023, 28 November 2023 and 18 May 2024, respectively;
(b)Mr Bates’ affidavits affirmed on 31 August 2023 and 22 November 2023, respectively;
(c)expert reports dated 12 February 2024, 15 April 2024 and 25 April 2024 of Sam Borenstein, psychologist; and
(d)affidavits or witness statements containing character references by Neil Hemmings (client), Brian Watkins (client), Sheeva Takavoli (client), David Abramovich (client), John Rae (client), David Gore (client), Peter Wallington (client), Glenn McNally (client), Paola Ferragina (Bluepoint’s client services manager), Michael Cvetkovski (a financial adviser at Bluepoint) and Razmik Asatour (a board member of a non-profit organisation, Homenetmen Ararat Association Inc (‘Homenetmen’)).
The applicant’s counsel informed the Tribunal that the applicant had received detailed advice in relation to the privilege against self-incrimination. The applicant did not invoke the privilege in respect to any question he was asked during the hearing.
ASIC relied upon witness statements prepared by Nejra Mandzic (ASIC employee) and Warren Herbs (employee of the Australian Council for Education Research (‘ACER’)[6]). Neither Ms Mandzic nor Mr Herbs was required to attend the hearing for cross-examination.
[6] ACER developed the Exam and administered it in various years, including 2021.
Both parties also relied upon various other documents filed with the Tribunal to which reference will be made where appropriate later in these reasons.
The summary of the non-contentious facts and procedural history that follows is based upon the evidence referred to at [‎23] to [‎26] above.

Applicant’s qualifications, experience and roles within Bluepoint

The applicant is currently 45 years old. He is married to Ms Karamian, and they have two children who are at school in year 7 and year 4. He obtained a Diploma of Financial Services (Financial Planning) from Integratec in 2003, a Bachelor of Business degree from the University of Technology Sydney in 2004 and a Master of Business in Finance degree from the University of Technology Sydney in 2011.
From 14 September 2002 until 9 March 2023, the applicant worked at Bluepoint, initially as an assistant to another financial adviser. He became a financial adviser in July 2003. He became an ‘equity partner’ in June 2005 and was appointed a director of Bluepoint on 1 July of that year.
In about 2008, the applicant and Mr Bates (through their family companies) became the sole equal shareholders of Bluepoint. From 2010, the applicant acted in the roles of managing director, responsible manager and senior investment adviser at Bluepoint.
The applicant has described his role at Bluepoint as involving the following responsibilities:
(a)ensuring that Bluepoint has up to date professional indemnity insurance;
(b)managing regular audits of Bluepoint’s business;
(c)periodically auditing Mr Bates’ work;
(d)arranging for client files to be audited by external compliance firms;
(e)periodically reviewing and updating Bluepoint’s policies and procedures; and
(f)giving regular financial advice to a client-base of approximately 90 clients.
It is not in dispute that, until December 2021, the applicant complied with financial services laws, adopted a remuneration model that was fair to clients and acted ethically and honestly, and in the best interests of clients.
It is also not in dispute that Mr Cvetkovski joined Bluepoint as a financial adviser in May 2020 and that the applicant and Mr Bates had decided to gradually transfer some of their retail clients to him from around mid-2021.
The applicant was replaced by Ms Karamian as a director of Bluepoint on 15 March 2023, after the Banning Order was made.

Alteration of the Exam Statement on 10 December 2021

In early 2021, the applicant became aware that, in order to maintain his status as a ‘relevant provider’ he had to pass the Exam by 1 January 2022.

There were six sittings of the Exam in 2021, with the last sitting occurring on 13 November 2021. The applicant initially enrolled to sit the Exam on 22 May 2021. He rescheduled that Exam sitting to 20 July 2021, then to 11 September 2021 and eventually to 13 November 2021.
The applicant sat the Exam on 13 November 2021. At 12:25 pm on 10 December 2021, he received a notification by email that his Exam result was available to be downloaded. The email contained information about resitting the Exam and requests for a review of the marking of the Exam.
At 12:49 pm on 10 December 2021, the applicant logged on to the Candidate Booking System and viewed his Exam Statement. The Exam Statement was in PDF form and comprised two pages. Page 1 set out his details, including his name and the date of the Exam, and next to ‘Result’ stated ‘Fail’. Page 2 was headed ‘Feedback’ and provided some guidance on the matters upon which a person resitting the Exam should focus, under three sub-headings. They were: ‘Financial Advice Regulatory and Legal Obligations’; ‘Applied Ethical and Professional Reasoning and Communication’; and ‘Financial Advice Construction’. The contents of page 2 were such as to indicate that the applicant failed the Exam and that the matters listed under the above mentioned sub-headings were specific to him.[7] However, it is not clear from the evidence whether the contents of page 2 were included in the Exam statements for all candidates sitting the Exam or only for those candidates who had failed it and, if the latter, whether the contents were specific to each such candidate or were generic in nature. Accordingly, I am unable to conclude that the contents of page 2 of the Exam Statement were specific to the applicant.
[7] Page 2 stated: ‘Should you wish to re-sit the exam, based on your responses to the questions in this attempt, you are encouraged to revise the learning outcomes for each of the curriculum areas as follows:’.
According to the uncontested evidence (including the applicant’s unchallenged evidence), the following events occurred on 10 December 2021 after the applicant logged on to the Candidate Booking System at 12:49 pm:
(a)He downloaded his Exam Statement and saw that he had failed.
(b)He sat in shock for several minutes. He tried to book another sitting of the Exam, but realised that there was nothing available. He sat at his desk shaking.
(c)He stepped away from his desk because of the stress and anxiety caused by the result.
(d)He went to the bathroom and ‘wash[ed] [his] face, and tr[ied] to put [his] thoughts together on what had just happened’.
(e)At 1:00 pm, he received an email from Mr Bates which attached a Money Management Newsletter which stated that only 52 per cent of advisers had passed the Exam before 1 January 2022.
(f)He used the ‘edit’ function on the Exam Statement PDF to type the word ‘Pass’ over the word ‘Fail’ as the PDF was not protected in any way.
(g)To ensure that the font of the word ‘Pass’ matched the word ‘Fail’, he reviewed the Exam statement of another adviser who had passed the Exam, and transferred that font onto his Exam Statement.
(h)He took a screenshot of page 1 of his altered Exam Statement and, at 1:13 pm, emailed that screenshot to Mr Bates.
The applicant did not seek to re-sit the Exam or request a review of the marking of the Exam.
After receiving the applicant’s email on 10 December 2021, Mr Bates updated the FAR to show that the applicant had passed the Exam and was authorised to advise retail clients.

Applicant’s conduct between 10 December 2021 and 16 May 2022

Between 10 December 2021 and 16 May 2022, the applicant attended the offices of Bluepoint (when he was not working from home or on leave) during business days and performed the same duties he had performed prior to 10 December 2021, even though he was not legally authorised to advise retail clients from 1 January 2022. He advised retail clients on the following dates: one on 4 February 2022, one on 8 February 2022, two on 8 March 2022, one on 30 March 2022, one on 1 April 2022, one on 4 May 2022 and one on 11 May 2022.
Between 1 January and 16 May 2022, the applicant did not disclose to Bluepoint’s clients or his colleagues that he was not authorised to advise retail clients during that period. Bluepoint’s staff, clients and anyone making enquires (including by viewing Bluepoint’s website or searching the FAR) during this period would have concluded that the applicant continued to be authorised to advise retail clients.

Provision of falsified Exam Statement to ASIC on 17 and 18 May 2022

At 12:53 pm on 17 May 2022, Nejra Mandzic of ASIC sent an email to the applicant attaching a letter dated 11 May 2022 addressed to Bluepoint. The email briefly described the contents of the letter and stated: ‘Please confirm by [replying] to this email that you have received and can access the attached letter within 3 business days of this email being received.’[8]
[8] Emphasis in original.
ASIC’s letter dated 11 May 2022 stated that ASIC’s records indicated that the applicant had not passed the Exam by 1 January 2022 and was not eligible for an Exam extension, and that Bluepoint may have breached the financial services law by not updating the FAR which described the applicant’s status as ‘current’. The letter requested Bluepoint to check its records and, if they indicated that the applicant had passed the Exam or was eligible for an Exam extension, required Bluepoint to forward the relevant evidence to ASIC within 10 business days. The letter went on to state that if Bluepoint determined that it had not complied with the financial services law, it should, within 10 business days, lodge a notice with ASIC to update the FAR to describe the applicant’s status as ‘ceased’. The letter relevantly concluded as follows:
Finally, it is important to note that the [applicant] is prohibited from providing Personal Advice from the date their authorisation ceased. Please confirm via return email within ten business days that:
·the [applicant] has not provided Personal Advice since you revoked their authorisation or 1 January 2022, as relevant; or
·if the [applicant] has provided Personal Advice during this time, please provide details including how many instances of, and when, Personal Advice was provided.
ASIC reserves the right to take action, including enforcement action, in relation to the matters set out in this correspondence. As the matters set out above may constitute a breach of the Corporations Act, you should also consider your obligation to report certain breaches of the law to ASIC. For more information about breach reporting, see Regulatory Guide 78.[9]
[9] Emphasis in original.
At 1:23 pm on 17 May 2022, the applicant logged on to the Candidate Booking System and viewed his Exam Statement. At 1:28 pm, he replied to Ms Mandzic’s email, relevantly stating ‘I have received the email and can access the attached’. He attached to his email both pages of the Exam Statement, with page 1 containing the false ‘Pass’ result. Two minutes later, at 1:30pm, he attempted to recall his email.
At 2:10 pm on 17 May 2022, the applicant sent an email to Mr Bates, which relevantly stated:
I am beside myself. I have received a letter [from] ASIC stating that according to their records I have not passed the [Exam]. Upon receiving the letter I have logged back into the ACER beside and the new certificate which looks a little different has fail on it.
I am not sure how to interpret this. ASIC letter is harsh.
Attached is their letter
Below is what I have drafted to ASIC
Dear Sir/Madam,
In relation to adviser 266730 we have on record the attached (Results). On the 10th of December an email was received confirming the results were available. The attached was downloaded and saved.
Upon receiving the email from ASIC on the 17^th of May I have logged back into to the ACER portal and to my shock I downloaded a statement different in appearance with ‘fail’ rather than ‘Pass’.
I am not sure how to interpret this. Was the original certificate an error or the current on[e]?
As there was no requirement to [resit] the exam no attempt has been made to do so since receiving the results.[10]
[10] The word ‘beside’ in the third line may have been intended to be ‘website’.
The applicant’s email to Mr Bates had embedded in it a screenshot of page 1 of his Exam Statement, which showed a ‘Fail’ result. Attached to the email were the letter he had received from ASIC dated 11 May 2022 and both pages of the falsified Exam Statement.
At 5:09 pm on 17 May 2022, the applicant forwarded to Mr Bates Ms Mandzic’s email and the ASIC letter attached to it, without any comment.
Prior to 2:11 pm on 18 May 2022, Mr Bates spoke to Ms Mandzic and stated words to the effect that he had evidence that the applicant had passed the Exam, and would send the results to ASIC.
At 2:11 pm on 18 May 2022, the applicant sent an email to Mr Bates, with which he forwarded Ms Mandzic’s email on 17 May 2022 and to which he attached page 1 of the falsified Exam Statement. The applicant’s email relevantly stated:
Not sure if based on your conversation we need to go through the false positive or false negative issue as yet.
Perhaps this will be sufficient?
To whom it may concern,
I am responding on behalf of Todd Karamian.
I am the Responsible Manager of Bluepoint Consulting AFSL 277860.
Please find attached a copy of Todd’s FASEA exam results which was received on 10 December 2021 and FAR updated on the same day.[11]
[11] FASEA is the Financial Adviser Standards and Ethics Authority, which was responsible for the Exam prior to 1 January 2022.
I note that, although the above email was in ASIC’s possession, it was not included in the Tribunal documents filed by ASIC and its counsel did not become aware of it until after the applicant had completed his evidence on the first day of the hearing. Mr Bates was asked questions about the email and the applicant was recalled on the second day of the hearing so that he could be cross-examined on it. The applicant had not previously been asked questions by ASIC regarding the email.
The applicant and Mr Bates had at least one conversation on 17 May 2022 about whether the applicant had passed the Exam and the ASIC letter dated 11 May 2022. The evidence of the applicant and Mr Bates relating to their communications on that day, and my findings in relation to the evidence, are discussed later in these reasons.
At 2:24 pm on 18 May 2022, Mr Bates sent an email to Ms Mandzic to which he attached the falsified first page of the Exam Statement. Mr Bates’ email closely followed the wording in the applicant’s email to Mr Bates quoted at [‎51] above. Mr Bates’ email was in the following terms:
I am responding on behalf of Todd Karamian as the Responsible Manager of Bluepoint Consulting AFSL 277860.
Please find attached a copy of Todd’s FASEA exam results which was received on 10 December 2021. I updated the FAR … on the same day.

Applicant’s conduct between 19 May and 29 August 2022

Between 19 May and 28 August 2022, the applicant acted in the same manner as that described at [‎42] and [‎43] above. In that period, he advised retail clients on the following dates: one on 9 August 2022 and one on 19 August 2022.
On 25 August 2022, the applicant received a letter from ASIC asking him to participate in a formal interview.
On the morning of 29 August 2022, the applicant met with Mr Bates. He informed Mr Bates that he had failed the Exam and altered the Exam Statement, and that ASIC was investigating him for providing false information to ASIC. Prior to the meeting, the applicant had prepared a letter to Mr Bates, which he relied upon in framing his conversation with Mr Bates. The letter relevantly stated:
When my results became available back in December, I was beside myself. I was sure that my advising future would be over from 1 January 2022 as I had only sat the exam once in 2021 and wasn't eligible for a further exam in 2022. The thought of losing my livelihood and unable to provide for my family. My young children and losing a business we had worked so hard for so long was unbearable, and I just couldn't be honest. At the time, I was not well informed of what options [were] available to failed advisers and [h]ow and if they could become advisers again or what they can advise on moving forward.
Leading to the exam my physical health and mental health was very poor. Covid had caused huge financial impact on [Ms Karamian’s] business, we had lost 2 family members to covid and the uncertainty, stress, and anxiety led to a substantial deterioration in my health when I was finally admitted to hospital and diagnosed with severe hypertension. My medication took some time to assist, and this was a major factor for me not sitting the exam earlier. I simply couldn't.
Because of the shock, stress and anxiety I wasn't of sound mind when I made the decision to change the result.
When in May ASIC requested proof of my results, I knew that I was in trouble. I wanted to be honest with you, but I just couldn't bring myself to disclosing it all to you. I was deeply embarrassed and was afraid how you would react. I was also afraid how this could impact the business and our staff.
…
I am asking for your support. My clients will need [to] be serviced by you and Michael [Cvetkovski] for the foreseeable future.
…
I am human and I made a terrible mistake.
I am very sorry …
Following their meeting, at 10:42 am on 29 August 2022, Mr Bates sent to the applicant a link to a newspaper article regarding proposed industry reforms. At 10:46 am, the applicant responded as follows:
I’m very sad, I see all these things and while I accept my wrongdoing fully, I can’t help but feel the system failed me. FASEA didn’t need to be that way. Every human has a breaking point, and I broke.
Now what I have loved and done so well and competently for so many years will be taken from me.
Thank you for your comments and support earlier today and from the bottom of my heart I am sorry for what I did.

Events after 29 August 2022

Between 29 August 2022 and 9 March 2023, the applicant did not advise any retail clients, but continued to advise wholesale clients.
On 8 September 2022, Mr Bates updated the FAR to show that the applicant ceased being a current financial adviser on 1 January 2022. On 9 September 2022, Mr Bates lodged with ASIC a breach report which described the applicant’s conduct as ‘Serious fraud’.
It is not in dispute that the advice that the applicant provided to 11 retail clients between 1 January and 29 August 2022 was appropriate and that none of those clients suffered any financial loss as a result of his wrongdoing.
On 19 September 2022, the applicant participated in a private examination before ASIC, pursuant to s 19 of the ASIC Act (‘s 19 examination’). He stated that, when he saw the ‘Fail’ result on 10 December 2021, he ‘just made a spontaneous decision at the moment, at that point to change it and just get [him] over the 1^st of January deadline, and [he] really didn’t think what happened after that’. He acknowledged that, on 17 May 2022, he asked Mr Bates to communicate with ASIC about his Exam result.
On three occasions during the s 19 examination, in response to questions, the applicant stated that he did not intend to mislead ASIC in relation to the falsified Exam Statement. The following exchange relates to one of the three occasions:
[Q.] Okay. And did you provide the … exam … results indicating the pass result to Tony Bates so that he could provide that to ASIC on your behalf?
A. Privilege. Yes. My intention was for him to see the pass result and update the ASIC register accordingly.
…
Q. Did you ask Mr Bates to send [his] email [of 18 May 2022 to ASIC]?
A. Privilege I asked Mr Bates as the responsible manager to correspond with ASIC’s letter [dated 11 May 2022].
…
Q. Okay. And you confirmed that Mr Bates had sent this document to ASIC on your behalf. And so by asking Mr Bates to send the financial adviser exam result, which indicated a pass result for you, did you intend to mislead ASIC to believe that you had passed the financial advisers exam?
A. Privilege. My intention was never to mislead ASIC.
[Q.] Did you intend for ASIC to believe that you’d passed the financial advisers exam?
A. Privilege. Yes.
On 16 November 2022, ASIC served on the applicant a notice of hearing for the purpose of determining whether to make a banning order under paras (d) (fit and proper person), (da) (training and competence) and (e) (non-compliance with financial services law) of the Corporations Act. The applicant did not attend the hearing scheduled for 8 December 2022, but made written submissions.
The applicant’s submissions to ASIC have been overtaken by his submissions to the Tribunal that were prepared in the light of the evidence. Accordingly, whilst I have read the applicant’s submissions to ASIC, I will not summarise them. However, it is worth noting that those submissions relied upon a letter dated 25 November 2022 from Peter Barclay, the applicant’s general practitioner, notes from Royal North Shore Hospital and five character references from Teni Berberian (the applicant’s sister who practises as a barrister), Elizabeth Assadourian (friend), Armond Harapeti (a board member of Homenetmen), Razmik Asatour (another board member of Homenetmen) and Bhavesh Mistry (a friend and business associate).
The letter from Dr Barclay stated that the applicant had been diagnosed with severe hypertension in 2021 and that blood pressure management had been complicated by the need for multiple medications, dosage changes and an allergic reaction. Dr Barclay opined that the applicant’s hypertension was caused by stress and that his health issues had had an adverse effect on his mental health and stress management during the preceding 12 to 18 months. The Hospital notes stated that the applicant had attended the Hospital on 13 May 2021 suffering from a headache, associated nausea and vomiting. The examination indicated that he had high blood pressure but his condition was otherwise unremarkable. The applicant was discharged on the same day with a recommendation that he follow up with his general practitioner.
As mentioned at [‎8] above, on 7 March 2023, ASIC made the Banning Order which took effect on 9 March 2023. ASIC determined that the power to make a banning order was enlivened on the basis that ASIC had reason to believe that the applicant was not adequately trained or not competent to provide financial services,[12] and that ASIC had reason to believe that he was not a fit and proper person to provide financial services.[13]
[12] Contrary to the Corporations Act, s 920A(1)(da).
[13] Contrary to the Corporations Act, s 920A(1)(d).
After he received the Banning Order, the applicant contacted clients to explain what he had done, apologise and arrange for Mr Bates or Mr Cvetkovski to take over as their financial adviser.
On 17 March 2023, the applicant competed the ‘Ethics and Professionalism in Financial Advice’ course offered by KAPLAN. In August 2023, he completed three courses provided by Financial Education on conflicts of interest, breach reporting and the roles and responsibilities of responsible managers. On 15 July 2023, he was accepted into an online graduate diploma of financial planning course at Western Sydney University.

EVIDENCE
Evidence of Mr Bates

In his first affidavit, Mr Bates stated that, despite the applicant’s actions in December 2021 and May 2022, he continued to believe, based on the close working relationship he had had with the applicant over the previous 20 years, that the applicant was a fundamentally ethical and honest person.
In cross-examination, Mr Bates stated that, after he received the email from the applicant on 10 December 2021 showing that the applicant had passed the Exam, he updated the FAR. He did not specifically recall informing the applicant that he had updated the FAR but said that he would have told the applicant as he had done for every adviser.

In cross-examination, Mr Bates stated that he called ASIC at 2:30 pm on 17 May 2022 after receiving from the applicant the email and letter the applicant had received from ASIC on that day. He did not recall speaking to the applicant prior to telephoning ASIC. The female employee of ASIC to whom he spoke informed him that ASIC had inherited some files from FASEA and found some administrative mistakes. Mr Bates had responded that the applicant had 20 years’ experience, was not a provisional adviser, there must been a mistake and that ASIC should fix it. After speaking to ASIC, he thought that the matter was resolved and he would not hear from ASIC again.
In cross-examination, Mr Bates said that his wife had reminded him, on the morning of the hearing, that the applicant had called him on the evening of 17 May 2022. In that telephone call, Mr Bates told the applicant that he had spoken to ASIC. After that call, Mr Bates had said to his wife words to the effect of ‘I don’t know what all the fuss is about’. In response to a question from the Tribunal, Mr Bates stated that he remembered thinking at the time that ‘there was a mountain out of a mole hill’ and that it was an administrative error on the part of ASIC which he could resolve with a phone call.
In cross-examination, Mr Bates stated that after his telephone call with the applicant, he prepared a draft email to ASIC which he intended to show to the applicant the next day. He believed that the applicant understood that he intended to send an email to ASIC, but could not recall if he had shown the draft email to the applicant.
In cross-examination, Mr Bates stated that, on 18 May 2022, the applicant sent him an email which suggested wording for a potential response to ASIC. Mr Bates used that wording to respond to ASIC on 18 May 2022. He responded to ASIC within 15 minutes of receiving the email from the applicant.
In cross-examination, Mr Bates stated that, after he had responded to ASIC, he informed the applicant that he had done so. He was satisfied that there had been an administrative error on the part of ASIC and that it was unlikely that he and the applicant would hear from ASIC again. He did not recall having a conversation with the applicant where he stated to the applicant words to the effect that ‘this is either an error or you failed and this will have be dealt with’. However, he added that it was ‘the sort of thing that [he] might say’.
In cross-examination, Mr Bates stated that he had not noticed anything unusual about the applicant’s behaviour in the period between May 2022 and August 2022. He and the applicant met on 29 August 2022 at the applicant’s request. The applicant confessed straight away and read out a letter. The applicant was struggling to get his words out. Following the meeting, he had many discussions with the applicant, who appeared to be very angry at the system and ASIC.
In cross-examination, Mr Bates stated that, since Bluepoint notified its clients that the applicant had been banned from providing financial advice, less than 10 clients left Bluepoint. The clients said that they left because there had been a breach of trust. The financial impact of those clients leaving Bluepoint was not sizeable. It was less than 10 per cent of Bluepoint’s overall earnings. But Bluepoint had also added clients.
In response to a question from the Tribunal, Mr Bates stated that at the end of 2021, about 70 per cent of the applicant’s clients were wholesale clients, with the remaining 30 per cent retail clients. Over the previous 20 years, his and the applicant’s practice generally had a large majority of wholesale clients. He clarified that, when wholesale clients are provided with certain superannuation advice, they are treated as retail clients for the purposes of that advice.
In cross-examination, Mr Bates stated that the applicant could have done so many things differently, including by choosing to focus solely on wholesale clients without passing the Exam. In response to a question from the Tribunal, Mr Bates stated that if the applicant had only advised wholesale clients it would have had ‘a minimal impact’ on Bluepoint. Bluepoint could have allocated retail clients to Mr Cvetkovski and Mr Bates. The applicant might have had to suffer the embarrassment of being supervised for a year, but the applicant was the CEO and was very effective and capable of running the business as well as giving advice. Clients would have been introduced to a new adviser but the impact on them would have been ‘very manageable’.
In response to a question from the Tribunal, Mr Bates estimated that the value of Bluepoint was between $3 million and $4 million. Bluepoint’s valuation has not been damaged since 1 January 2022 but, due to the Banning Order, Bluepoint has not been able to grow as fast as it otherwise would have because Mr Bates and Mr Cvetkovski have spent their entire time retaining existing clients, rather than obtaining new ones. In the absence of the Banning Order, Bluepoint might have been worth more than it is at present.
Both parties accepted that Mr Bates was a witness of truth.
I agree. Mr Bates was a very impressive witness who gave evidence in a frank, measured and forthright manner, and made concessions where appropriate. He did his best to recall events, acknowledged that his wife had assisted him in recollecting some events, and accepted that he could not recall some of the details about which he was being asked. I have no hesitation in accepting all aspects of Mr Bates’ evidence.

Evidence of the applicant
The applicant’s evidence by affidavit and orally

The applicant gave evidence on the first day of the hearing on 20 May 2024. As stated at [‎52] above, he was recalled for further cross-examination on 21 May 2024.
The applicant’s first affidavit stated the following: He ‘could not be more regretful for (and ashamed of) the actions which [he] took and which give rise to the circumstances the subject of this application’. His actions have ‘brought real hardship on [his] family’ and ‘significantly eroded [his] ability to provide for [his] family’.
The applicant gave evidence in his first affidavit that there was no excuse for his actions and he was conscious that he will need to ensure that nothing approaching his conduct will ever occur again. He stated that his ‘actions are capable of being viewed in the nature of an outlying event [or] abhorrent data point in a career where … [he had] at all other times discharged [his] obligations … honestly, ethically and to the very best of [his] ability’. He said that he feels ‘incredible shame at [his] conduct in December 2021’ and that his ‘actions were not in accordance with the principles of honesty, integrity and transparency which [he had] always held up above all else in [his] professional and personal life’.
The applicant stated in his first affidavit that, in 2021, he was under significant personal hardship. Ms Karamian’s uncle, with whom he was very close, had died of Covid-19 in December 2020, and Ms Karamian’s aunt died in January 2021. He described this period as ‘an awfully challenging and distressing time’. He also described the emotional impact on his family of Ms Karamian’s events business – which she had spent nearly 20 years building – stopping ‘overnight’ due to the cancellation of events resulting from the Covid-19 pandemic. He said that he was concerned about his ability to continue to service the family’s finances.
In his first affidavit, the applicant stated that, by early 2021, he was suffering from regular headaches, anxiety and nausea. In late April 2021, his migraines and anxiety increased to the point where they became debilitating. In May 2021, he attended a hospital with a severe headache and nausea. He was diagnosed with hypertension and started a new treatment regime. However, he developed an allergic reaction to the hypertension medication he had been prescribed. He continued to trial different medications and treatments with his general practitioner (Dr Barclay), however his anxiety, headaches and blood pressure continued, and his allergy symptoms did not properly resolve.
As discussed at [‎36] above, the applicant rescheduled the Exam several times throughout 2021. In his first affidavit, he stated that he did so because he felt that he was not mentally or physically able to sit the Exam. He was still suffering from anxiety, headaches, high blood pressure and allergic reactions. In November 2021, but decided to sit the Exam even though he was unwell because he was aware that he had to sit the Exam in 2021.[14] He did not think about requesting special consideration.
[14] The applicant’s first affidavit states 2022, but this appears to be a typographical error.
The applicant’s evidence of what he did on 10 December 2021 is reflected in the summary set out at [‎37] to [‎39] above.
In his first affidavit, the applicant stated that, when he realised that his failure of the Exam meant that he would have to be de-registered in January 2022, he thought ‘How am I going to tell my clients? How am I going to provide for my family?’.
In his first affidavit, the applicant stated that, after he received Mr Bates’ email at 1:00 pm on 10 December 2021,[15] he felt a level of shame and embarrassment. He ‘made the decision to change [his] results certificate on the spot’. He stated that his actions were not planned, but were based on his ‘completely spontaneous feelings of absolute panic’. He stated that his ‘immediate concern was to buy [himself] time’ to pass the Exam. In response to questions from the Tribunal, he stated that he did not thoroughly read the email notifying him that the Exam result was available to be downloaded, and accordingly did not realise that he could have asked to re-sit the Exam or have his Exam remarked. He also stated that he did not read page 2 of the Exam Statement.
[15] See [‎39(e)] above.
The following exchange took place during cross-examination about whether the applicant intended for the FAR to be inaccurate:
I suggest that the purpose of you providing a copy of this falsified result to Mr Bates [on 10 December 2021] was for him to see the pass result and update … the ASIC register accordingly. Is that correct? ---Yes …
So it was your intention for Mr Bates to cause the financial adviser’s register to be inaccurate. Is that correct? --- I didn’t approach it with that intent, but yes.
In response to questions from the Tribunal, the applicant acknowledged that, in falsifying his Exam Statement, he was making deliberate choices and was not acting as a robot. However, he stated that his emotional and mental state was so poor that he did not really recall what was going through his mind at the time, and described his state of mind as having almost an out-of-body experience. He was aware that altering the Exam result on 10 December 2021 was wrong.
In cross-examination, the applicant stated that he did not turn his mind to whether he would be able to continue his non-advisory roles at Bluepoint.
When the applicant was asked in cross-examination what he did to ‘buy time’ after falsifying his Exam Statement on 10 December 2021, he stated that the first thing he did was to try to understand whether he could re-sit the Exam, which he realised was not an option. He then looked at what he would need to do to be able to become a licensed financial adviser again. He described how he felt when he learnt what would be required in the following terms:
It was horrifying to discover that someone with a Masters in Funds Management and a Bachelor in Finance had to return to study and complete a graduate diploma purely in financial planning, to then have to go through a provisionary period of 12 months under the guidance of a senior adviser, and having completed a fairly challenging master’s degree, I knew the challenges in having to study another post-graduate degree that had eight subjects, and I knew that this was a process that was going to take a number of years for me before I could return back to my career as it was.
In cross-examination, the applicant stated that, after 1 January 2022, he was aware that he was not permitted to provide advice to retail clients, but continued to do so anyway. In response to a question from the Tribunal, the applicant stated that, after 1 January 2022, he did not change where (home or office) he worked, his hours of work or how he related to his clients. He was still listed as a financial adviser on Bluepoint’s website and in brochures. He accepted that by continuing to act in the way that he always had, he would have given the false impression that he was authorised to provide financial advice to retail clients, and that it was wrong to do so. He recalled spending a lot of time in early 2022 trying to understand the best way to guide clients through the volatility that arose due to the war in Ukraine, and to undertake an orderly handover to other advisers. He did not remember spending any time sitting down and thinking about how he would go about bringing to light his failure of the Exam. There was one occasion when a referral was sent to him, which he passed onto another colleague and he thought about how he would break the news to Mr Bates. He felt that he could not sit with Mr Bates and tell him what he had done because he was so ashamed, embarrassed and regretful.
In cross-examination, the applicant stated that, after 1 January 2022, he was very conscious of expediting the transfer of his clients to other Bluepoint colleagues. He was still very paralysed in the sense that he did not know how to deal with the situation, but was very conscious of making sure he could introduce colleagues to clients as quickly as possible.
In cross-examination, the applicant stated that retail clients were amongst the smaller part of his client base. Although the majority of his clients were wholesale clients, an important part of assisting those clients was providing advice about superannuation, which was classified as retail advice. Accordingly, he knew that his inability to provide advice to retail clients would apply to a very large portion of his client base.
In cross-examination, the applicant accepted, at the time he was giving evidence, that he had not acted in the best interests of his retail clients by advising them in 2022 without authority to do so. However, in 2022, he honestly believed he was looking after his clients and making sure that they would be able to deal with the volatility of the financial markets. He then said that he had always acted in the best interests of his clients and always put them first.
In his first affidavit, the applicant stated that, when he received ASIC’s email dated 17 May 2022 attaching its letter dated 11 May 2022, he panicked and ‘felt trapped by [his] actions in December 2021’. He ‘tried to convince [himself] to come clean to [Mr Bates, but] … couldn’t bring [himself] to be honest’. He ‘was deeply embarrassed and ashamed, and [he] was afraid of how [Mr Bates] would react’. He sent an email to Mr Bates ‘quickly, and in a panic’. The ‘matters which made it too difficult for [him] to confess to [Mr Bates were his] fears about [Mr Bates’] reaction, and the impact on the [Bluepoint] business’.
In cross-examination, the applicant accepted that in response to receiving ASIC’s email of 17 May 2022, he had attached his falsified Exam Statement in reply to ASIC. He said that this was an error that occurred because, at the same time, he was preparing an email to Mr Bates. He had attached the falsified Exam Statement to the wrong email and accordingly, immediately attempted to recall it.
In cross-examination, the applicant stated that he could not recall whether, after he sent his email to Mr Bates on 17 May 2022, he had a discussion with Mr Bates. However, he could recall having a conversation with Mr Bates around that time in which Mr Bates said words to the effect that either there was an error about the Exam result, or the applicant had failed the Exam and he would have to deal with it. In response to the two alternative interpretations suggested by Mr Bates, he said that he ‘just continu[ed] with being untruthful’ and that this was a choice he made at that time. He did not think that he asked Mr Bates to contact ASIC on his behalf, but thought that Mr Bates had contacted ASIC confirming that he had on record that the applicant had passed the Exam. He was not aware that Mr Bates had a telephone conversation with ASIC, and did not recall having any discussion with Mr Bates about Mr Bates contacting ASIC. He said that he ‘knew at that point that [his failure of the Exam] was going to be discovered in a … timely manner.’
In cross-examination, the applicant was asked about his intention regarding Mr Bates sending an email to ASIC on his behalf. The relevant parts of the transcript are set out below:
It was your intention, wasn’t it, that, by this email being sent to ASIC, that ASIC would be misled into believing you had passed the exam and their records were in error? Is that correct?--- … I think I was trying to cover up more with my business partner. That’s certainly what was going through my mind. Make him – give him, you know, that view that I had passed the exam. Certainly, my intention wasn’t to be dishonest with the regulator, but, of course, that’s exactly what’s happened here.
So you’re saying it wasn’t your intention that ASIC be misled by Mr Bates’ email?---I think that’s a consequence of what occurred, but my initial view was, ‘I can’t tell [Mr Bates] what has happened and I just have to continue with this lie.’
But you intended for ASIC to believe that you had passed the exam. Is that correct?---I believe that that is exactly what has occurred.
But was that your intention at the time?---I don’t think that was my intention. My intention wasn’t that, but … I wasn’t thinking properly at the time.
The applicant was then asked about the responses he gave to ASIC during his s 19 examination about his intention to mislead ASIC. The relevant parts of the transcript are set out below:
Your answer [in the s 19 examination] was that you never intended to mislead ASIC. Then you’re asked, ‘Did you intend for ASIC to believe that you’d passed the financial advisers’ exam?’ and you said, ‘Yes.’ That’s a little bit different from the evidence you just gave, is it not, that it wasn’t your intention?---Well, I interpret the question, ‘Was my intention’ – I interpret it as misleading ASIC …
Well, do you - - -?---That’s how I interpret the question.
Do you accept that your answer there is true, that you intended for ASIC to believe you had passed the exam?---Yes.
You accept that that’s misleading, don’t you?---Yes, I do.
Do you accept that seeking to mislead ASIC is, in and of itself, a very serious issue? --- Of course. Having time to reflect on that … absolutely.
When the applicant was recalled for further cross-examination after Mr Bates had given evidence, he was taken to his email to Mr Bates sent at 2:11 pm on 18 May 2022. As discussed at [‎51] above, that email referred to ‘your conversation’. The applicant did not remember sending that email and did not recall any conversation he had had with Mr Bates before sending the email. He was not sure whether in that email he was providing Mr Bates with some text which Mr Bates could then send to ASIC. He was also not sure whether he had asked Mr Bates to contact ASIC on his behalf or if Mr Bates had asked him for some wording or guidance about how to contact ASIC on his behalf.
In further cross-examination, the applicant was asked if he remembered speaking to Mr Bates on 17 May 2022 about the email received from ASIC on that day. He said that he did not remember any conversation with Mr Bates, but did not deny that a conversation had taken place. When pressed on whether the reference to ‘your conversation’ was Mr Bates’ conversation with ASIC, the applicant stated that he could not answer with certainty.

In further cross-examination, the applicant was taken to his first affidavit which stated that he had sent a single email to Mr Bates on 17 May 2022 and that he had sent it in a panic, without thinking it through. He was asked whether the fact that he had sent an email to Mr Bates on 18 May 2022 and had discussed ASIC’s letter with Mr Bates meant that it was more than just a single quick decision. He responded that the ‘quick decision’ related to the email sent on 17 May 2022 before any conversations had taken place. He denied that, in his affidavit and oral evidence, he was trying to minimise the steps he took on 17 and 18 May 2022.
In cross-examination, the applicant responded as follows to a question about why he did not confess on 17 May 2022 when he realised his wrongdoing would be uncovered:
I was still in the process of handing over clients, and I felt that that was one of the most important aspects of this purely because I had been adviser to these clients for a very long time and they must be in safe hands. That was [at] the forefront of my thoughts. The second very important matter was I simply couldn’t bring myself to confessing this to [Mr Bates].
In response to a question from the Tribunal, the applicant stated that because he did not know how to confess to Mr Bates, he continued to lie and presented ASIC’s email to Mr Bates as if he was not sure what had occurred. He agreed that he had made a choice to continue to lie, and that he felt that his clients and his family were benefitting from that choice. He agreed that there was a logic to his choice, as it enabled him to keep working and financially benefit from that work. He stated that he could now see that some of his thought processes in 2022 were not rational, despite appearing to him to be rational at the time. He stated that, despite lacking some rational decision making capacity, he was still able to tell the difference between right and wrong.
In response to a question from the Tribunal as to whether, prior to being informed by ASIC that he was being investigated, he had considered when he would disclose his wrongdoing, the applicant stated that completion of an orderly handover of clients to other advisers would have determined the timing of any confession.
In cross-examination, in response to a question whether he maintained that his conduct consisted of two decisions made in a panic, the applicant stated ‘I believe so … two separate occasions which … were important points in time’. He accepted that each time he provided advice to a retail client he was doing the wrong thing but he did not look upon each time as involving a decision, as it was something that he had done for a long time and which came naturally to him.
In cross-examination, the applicant was taken to the email set out at [‎58] above. In response to the question ‘Do you believe the system failed you?’, he stated: ‘Sitting here today … no, I don’t think the system failed me. I failed myself’.
In cross-examination, the applicant stated that he had seen a psychologist for nine sessions over a period of several months after the Banning Order was made. He is no longer seeing a psychologist as he is directing all his resources towards the Tribunal proceeding.
In his affidavits dated 30 August 2023 and 28 November 2023, the applicant deposed to his financial obligations as follows:[16]
(a)He services a mortgage on his family home, approximately 83% of which is interest only. The interest-only period ends on 24 September 2026. The monthly instalments are $6,755.89.
(b)He pays school fees for his two children in the amount of about $65,000 a year.
(c)He services a business loan for his equity in Bluepoint in the amount of $940,000, with monthly instalments of around $5,163.34.
(d)He services a loan which was used to purchase an apartment to rent to his parents-in-law. The monthly instalments are $1,842. He also pays yearly levies in the sum of $8,385.
[16] I have not distinguished between liabilities owed by the applicant and those owed by his family company.
The applicant stated that he was ‘constantly terrified by [his] ability to service [his] family debts’ and if he is unable to earn a salary with Bluepoint, ‘it will not be long before [he] will have to sell [his] assets’. In his second affidavit he expressed concern that he will face difficulties in renegotiating the loan on his family home when the interest-only period ends.
The applicant’s first two affidavits did not provide a complete statement of his family’s financial position because they focused upon liabilities and expenses and did not fully describe the family’s assets and income.
At a directions hearing on 13 May 2024, the Tribunal indicated that that, to the extent that reliance was placed by the applicant on his and Ms Karamian’s financial obligations and liabilities, the Tribunal would be assisted by information on his and Ms Karamian’s assets and their income from all sources. In response, the applicant swore his third affidavit on 18 May 2024. In that affidavit, he stated that the three things which have caused him the greatest amount of stress since the Banning Order was made are: the thought that his children might have to change schools; the thought that he might have to sell the family home; and the thought that he might have to ask his parents-in-law to move out of the apartment that had been purchased to rent to them.
In his third affidavit, the applicant stated that, based upon online estimates, there was between approximately $1.75 million and $3 million in equity in his family home and between $470,000 and $690,000 in equity in the apartment that had been purchased to rent to his parents-in-law. His parents-in-law pay $250 per week in rent, which is well below market and is fixed based upon what his in-laws can afford from their age pension.
In his third affidavit, the applicant stated that, although he estimated that the ‘book value’ of Bluepoint was $3 million – of which he owns 50% through his family trust – his sense was that its ‘market value would be likely to be considerably lower given [his] personal circumstances’.
In his third affidavit, the applicant stated that he continues to receive a monthly dividend from Bluepoint as its 50% owner. He has received a total of $101,500 to date during this financial year. In cross-examination, he stated that that monthly dividend has decreased, as the performance of Bluepoint has ‘deteriorated over the last 12 months or so’.
In his third affidavit, the applicant stated that Ms Karamian’s business is back up and running and that her forecasted net business income for this financial year was $180,000, due to pent up demand that has come back after the Covid-19 pandemic. Ms Karamian is now a director of Bluepoint and receives an annual salary of $190,000.
In his third affidavit, the applicant referred to the following additional family assets:
(a)He and Ms Karamian have joint bank accounts with a total credit balance of about $102,000.
(b)He and Ms Karamian have additional individual savings, but personal loans exceed their savings by about $22,000.
(c)He and Ms Karamian each has a car valued about $80,000 and $110,000 respectively, which are being financed through hire purchase arrangements.
(d)The Karamian Family Super Fund also has assets, but they cannot be accessed until retirement.
In cross-examination, the applicant stated that his car cost around $120,000 and was acquired in either late 2022 or early 2023. Ms Karamian acquired her car for around $118,000 in March or April of this year.
In cross-examination, the applicant stated that, at the time he altered his Exam Statement, he was under financial uncertainty because of Ms Karamian’s business, which had lost a significant number of its clients due to the Covid-19 pandemic. He did not know the full impact of the loss caused due to the Covid-19 pandemic but would imagine that Ms Karamian’s business had not recovered by 2022.
In cross-examination, the applicant stated that he believed that, if the Banning Order remains in place, he will suffer significant financial hardship. He has not attempted to find another paid job. He had spoken to a few accountants to see if he could assist them on a consulting basis, but nothing has eventuated. He has not looked at anything outside the financial services industry, as it is all he knows.
In response to a question from the Tribunal, the applicant stated that if he were to sell his family home – which is his family’s largest asset – he would be able to ‘pay down a lot of debt and take those [financial] pressures off’.

Findings on the applicant’s credibility and the reliability of his evidence

Counsel for the applicant submitted that the applicant was a credible witness, who gave answers honestly and responsively, did not prevaricate or give self-serving speeches, but answered questions directly. Counsel contended that the applicant made appropriate, full and repeated concessions, acknowledged when he could not recall a matter and indicated when he would be speculating. It was said that, in giving evidence, the applicant demonstrated understanding and insight.
Counsel for ASIC submitted that, where there was a factual inconsistency between the evidence of the applicant and Mr Bates, or where there was an absence of evidence given by the applicant, Mr Bates’ evidence should be believed. Counsel for ASIC contended that the applicant made self-serving speeches and gave evidence in cross-examination which was inconsistent with his affidavit evidence, such that the Tribunal should have concern as to how forthright he was in his affidavit evidence.
Counsel for ASIC argued that the applicant’s professed lack of recollection of some matters should not be believed, particularly in relation to the matters in May 2022 concerning his emails to Mr Bates, which were then sent to ASIC. According to counsel, the applicant appeared to be less than forthright in some of his evidence to the Tribunal, namely about whether he had asked Mr Bates to correspond with ASIC on his behalf on 17 and 18 May 2022.[17] Counsel acknowledged that the applicant had made some appropriate concessions, and was, in some instances, quite frank, to his own detriment. However, counsel stated that, given the information that had come to light, the applicant had little option but to admit certain things.
[17] See [‎106]–[‎108] above.
I find that, overall, the applicant was an honest witness who did not deliberately lie or seek to mislead the Tribunal. However, there are a number of unsatisfactory features of his evidence. Consequently, I have not accepted all of his evidence as accurate or reliable. By contrast, I have accepted the entirety of Mr Bates’ evidence. Accordingly, where the applicant’s evidence was inconsistent with the evidence of Mr Bates, I have preferred the evidence of Mr Bates.
The unsatisfactory features of the applicant’s evidence fell into the following categories.
First, the applicant gave implausible evidence when he said that he did not recall two matters which he would have been expected to remember based upon the assistance that was provided by contemporaneous documents and common sense.
The first instance of implausible evidence about lack of memory concerned whether the applicant asked Mr Bates on 17 or 18 May 2022 to forward the falsified Exam Statement to ASIC. The similarity between the applicant’s draft email to ASIC and the final version Mr Bates sent to ASIC, as set out at [‎51] and [‎54] above, leaves as the only rational inference that the applicant requested Mr Bates to send to ASIC an email of the type that the applicant had prepared together with the screenshot of the falsified Exam Statement. Yet, in oral evidence, the applicant repeatedly refused to acknowledge the obvious. He said that he had not remembered whether he had asked Mr Bates to write to ASIC on his behalf. This evidence of lack of recollection is implausible and inconsistent with what the applicant stated at the s 19 examination, but not a deliberate lie.[18] In reaching this conclusion, I have taken into account the matters set out at [‎52] above.
[18] See [‎62]–[‎63] above.
The other instance of implausible evidence about lack of memory concerned the applicant’s statement both in the s 19 examination and in his oral evidence before the Tribunal that he did not intend to mislead ASIC about his Exam result.[19] The applicant accepted that he deliberately falsified his Exam Statement and intended that Mr Bates would rely upon it in his communications with ASIC for the purpose of the applicant remaining on the list of authorised financial advisers maintained on the FAR.[20] In these circumstances the only available inference is that the applicant intended to mislead ASIC so that he could continue to advise retail clients after 1 January 2022 when he was not authorised to do so. In my opinion, the applicant refused to acknowledge that he intended to mislead ASIC not because he wanted to lie to the Tribunal but because he lacked insight as to whether, assessed objectively, his conduct necessarily involved an intention to mislead ASIC. This reflects adversely on the extent of his insight. I will discuss his insight further below.
[19] See [‎104]–[‎105] above.
[20] See [‎93] above.
Secondly, the applicant has sought to understate the seriousness of his wrongdoing. In his first affidavit, he stated that he made the decision to falsify the Exam Statement ‘on the spot’ and that his actions were based on ‘completely spontaneous feelings of absolute panic’.[21] As discussed later in these reasons,[22] his decision was not made ‘on the spot’ and it was neither spontaneous nor panicked. Rather, as demonstrated at [‎39] above, he deliberately engaged in several discrete steps over a period of 24 minutes.
[21] See [‎92] above.
[22] See [‎168]–[‎177] below.
In his first affidavit, the applicant described his wrongdoing as a singular ‘outlying event’ and ‘abhorrent data point’.[23] In cross-examination, he maintained that his conduct consisted of two decisions made in a panic.[24] Such descriptions understate both the nature and seriousness of his conduct. It was not a singular event or a one-off mistake or two decisions made in a panic. As discussed later in these reasons,[25] his conduct involved deliberate and continuous dishonesty for over eight months. The conduct continued even after he became aware on 17 May 2022 that it was likely that his dishonesty would be exposed by ASIC.
[23]          See [‎86] above.
[24]          See [‎112] above.
[25]          See [168]–[‎178] below.
Thirdly, there was an element of exaggeration and selectivity in the applicant’s first and second affidavits regarding financial hardship for his family, prior to the position being clarified to my satisfaction by his third affidavit. For the reasons set out below,[26] I do not accept his statement in his first affidavit that his actions ‘significantly eroded [his] ability to provide for [his] family.’[27]
[26] See [‎265]–[‎267] below.
[27] See [‎85] above.
Fourthly, there were inconsistencies between the applicant’s evidence and Mr Bates’ evidence, which I have accepted in its entirety. Two examples stand out. The first example relates to the value of Bluepoint and how it was affected after 29 August 2022. The applicant stated that his sense was that Bluepoint was worth considerably less than $3 million and that the performance of the business had deteriorated, whereas Mr Bates stated that Bluepoint was worth between $3 million and $4 million and that its value had not decreased since 1 January 2022.[28] The second example relates to the impact on Bluepoint of the applicant’s inability to advise retail clients. The applicant’s evidence suggested that the impact would be material whereas Mr Bates’ evidence was to the effect that the impact would be minimal.[29]
[28] See [‎78], [‎81], [‎120] and [‎121] above.
[29] See [‎80] and [‎99] above.

Reports of Mr Borenstein

Mr Borenstein interviewed the applicant by audio visual link on 24 January 2024 and 15 April 2024 for the purpose of giving expert evidence in this proceeding. In his reports, Mr Borenstein referred to the information that the applicant provided to him about his physical and mental health in 2021 and 2022. That information included: the sudden death of the applicant’s father in October 2010; the deaths of Ms Karamian’s uncle and aunt in 2020; the adverse financial impact of the Covid-19 pandemic on Ms Karamian’s business; the stress caused by the pandemic and its economic impact; the diminished motivation, sleep and appetite disturbances and headaches the applicant suffered in 2021; and the diagnosis of severe hypertension in May 2021 and the subsequent adverse effects of the treatment for hypertension until the correct medication was determined.
On the basis of the information the applicant provided and Mr Borenstein’s observations of him:
(a)in his second report dated 15 April 2024, Mr Borenstein expressed the following opinion:
[The applicant’s] conduct in altering his FA exam Certificate and providing the certificate to Mr Bates in December 21 and failing to notify either Mr Bates or [ASIC] after 2021 of his conduct and his providing his altered FA Certificate to Mr Bates following [ASIC’s] query to him on 17 May [2022], is … explained by [the applicant’s] severe symptoms of anxiety and depression warranting the diagnosis of a chronic and severe Adjustment Disorder with Mixed Anxiety and Depressed Mood, with features of Major Depression, impacting negatively on decision making and judgement, and explains the aberrant and uncharacteristic behaviour for which [the applicant] continues to express guilt, remorse and contrition.
Recent DASS 21 results (15 April 2024), [confirm] ongoing moderate symptoms of depression, which includes feeling downhearted and blue, and feeling he is not worth much as a person; mild symptoms of anxiety and stress, which includes difficulty winding down, difficulty relaxing, and reduced tolerance to frustration with occasional breathlessness, and worrying about situations in which he might panic and make a fool of himself.
I recommend [the applicant] return to his general practitioner and discuss the possibility of appropriate pharmacotherapy and referral to a psychologist for ongoing treatment under a Mental Health Care Plan.[30]
(b)In his third report dated 25 April 2024, Mr Borenstein expressed the following opinion:
Symptoms of severe anxiety and severe depression impacts negatively on emotional wellbeing, behaviour and cognitive functioning, and the worsening clinical picture of severe and chronic symptoms of anxiety and depression described by [the applicant] impacted negatively on his ability to form proper judgement, decision making and behavioural choices, which … explains the untypical and aberrant behaviour [the applicant] was exhibiting between May 2021 and had significantly worsened by November 2021 and August 2022.
In particular, symptoms of anxiety resulted in [the applicant] functioning in so-called survival mode and he exhibited fight or flight reactions, and, in effect, hijacked by his emotions, and less able to access his rational brain and process things rationally.
…
[The applicant] was … in the throes of chronic and severe symptoms of anxiety and depression when he altered the FA Exam Certificate in December 2021.
[30] Emphasis in original.

Evidence of character witnesses

The affidavits or witness statements prepared by clients of the applicant (Mr Hemmings, Mr Watkins, Ms Takavoli, Dr Abramovich, Mr Rae, Mr Gore, Mr Wallington and Dr McNally) were similar in nature. The affidavits and witness statements were broadly to the following effect: the clients found the applicant to be an honest, diligent, proactive and competent financial adviser; his wrongdoing came as a shock to them and was out of character; he was remorseful; and they had confidence in him and would be happy to resume receiving his advice if he were authorised to advise them. The clients described the wrongdoing that the applicant disclosed to them broadly as falsifying an exam result, although Dr McNally also stated that the applicant kept providing advice when he ‘shouldn’t have’. Mr Hemmings described the applicant’s wrongdoing as ‘obviously a mistake’; Mr Watkins described it as ‘a poor impulsive decision without thinking’ and a ‘mistake’; and Dr Abramovich and Mr Wallington described it as a ‘mistake’.

The applicant emphasised that it was common ground that the advice he gave to his clients was appropriate, and that no client suffered financial loss. According to him, the Exam was directed to the standards applicable to advisers who provide personal advice to retail clients. It was said that there was no need for the Tribunal to protect the community from the applicant’s involvement with Bluepoint by issuing a banning order beyond the provision of financial advice to retail clients.
It was said by the applicant that if a banning order that was expansive in scope was imposed, it should be of a lesser duration.
ASIC submitted that the scope of any banning order should encompass all of the matters set out in s 920B so that the ban extends beyond the provision of financial advice to retail clients. ASIC contended that, due to the applicant’s dishonesty and disregard for statutory obligations, it is not appropriate that he play a senior or controlling role in a financial services business which would enable him to control, supervise or influence others who are providing financial services. ASIC argued that, because the applicant demonstrated that he was willing to involve others in his wrongdoing, he does not have the appropriate character traits to control and supervise others in a financial services business.
ASIC referred to the fact that one of the obligations of a financial services licensee is to ensure that its directors are fit and proper persons. ASIC contended that, in those circumstances, it would be inappropriate for the Tribunal to find that the applicant was not a fit and proper person to provide financial services, yet at the same time permit him to be a director or controller of a holder of an Australian financial services licence.
In my opinion, in the circumstances of this case, it is necessary for the banning order to be comprehensive and to extend to the capacities of financial adviser, officer of a financial services business and controller of such a business.
The key reason for this conclusion is that the applicant’s conduct which has enlivened the power to make a banning order under ss 920A(1)(d), 920A(1)(da) and 920A(1)(e) does not relate to misconduct in relation to a particular financial product, lack of familiarity with a particular regulatory process or shortcomings in his capacity to advise any particular class of clients. Rather, the misconduct involved serious and sustained dishonesty that went to the heart of the applicant’s legal authority to advise retail clients. Knowing that his Exam result meant that he would not be able to advise retail clients after 1 January 2022, the applicant engaged in a lengthy and continuous course of deliberate, serious and dishonest conduct which was predominantly motivated by self-interest. That conduct was contrary to the interests of his clients and breached the trust of those clients and his colleagues.
If I had found that the justification for making a banning order was confined to the applicant’s lack of knowledge or ability in a particular area of financial advice or clients with a particular personal attribute or type of investment portfolio, it may have been possible to make a banning order that merely required supervision or further training, or permitted the giving of advice only to particular classes of clients. However, I have not made such a finding. My findings in relation to ss 920A(1)(d), 920A(1)(da) and 920A(1)(e) are more fundamental and pervasive.
As I have stated at [‎189] above, the applicant’s deficient insight into his wrongdoing must be considered not only in relation to his role as a financial adviser but also his role as an officer or controller of Bluepoint or any other entity that carries on a financial services business. The role of an officer involves responsibility for mentoring and training of financial advisers, setting an example of honest and transparent behaviour and establishing the policies, procedures and culture of the company. The role of controller would enable the applicant to influence who is employed by the company and to establish its culture, policies, procedures and overall direction. As I have already discussed, by acting dishonestly over a period exceeding eight months, the applicant not only did not set a good example of honest and transparent behaviour, but placed Bluepoint in potential breach of financial services laws. His lack of full insight and deficiencies in training and competence mean that he is not a suitable person to mentor, train or lead other financial advisers. His dishonest conduct towards Mr Bates and other colleagues supports this conclusion. It follows that he is not a fit and proper person not only in relation to providing financial services but also in relation to being an officer or controller of a financial services business.
For the above reasons, it is necessary that the scope of the banning order extend to :
(a)providing any financial services;
(b)performing any functions as an officer of an entity that carries on a financial services business; and
(c)controlling, whether alone or in concert with one or more entities, an entity that carries on a financial services business.
In reaching the above conclusion, I have taken into account the proposed duration of a banning order, to which I now turn.

DURATION OF THE BANNING ORDER

The applicant submitted that the correct and preferable decision was to impose a significantly lesser sanction than the one originally imposed by ASIC. He contended that the gravity of his conduct is not a matter which automatically requires the imposition of the most serious ban, or a ban of the longest possible period.
The applicant referred to a number of matters which he submitted were relevant to the appropriate length of a banning order. According to the applicant, his conduct, while serious, was not the kind of deliberate course of conduct to enrich himself at the expense of others, and that this and the absence of loss by any person count in favour of a less stringent penalty. In this regard, he referred to the fact that there was no harm visited on any clients by reason of the advice he had given in the period after 1 January 2022. He submitted that his wrongful conduct was ‘an aberration or an outlier in the context of what was otherwise an unblemished longstanding career that spanned two decades.’ He also submitted that his understanding of the severity and gravity of his conduct was clear. He contended that he took full responsibility for his action and demonstrated genuine remorse and contrition.
It was said by the applicant that there was no need for specific deterrence,[81] given that the penalty already suffered by him would be adequate to deter any future misconduct. In relation to general deterrence, he submitted that the Tribunal needed to balance his personal circumstances with the need to deter others. He also submitted that failing to balance those circumstances would trespass into an excessively punitive, rather than protective, exercise.
[81] The applicant referred to ‘personal deterrence’. In this decision I have used the term ‘specific deterrence’.
The applicant contended that the fact that, in 2021 and 2022, he was under personal stress and was suffering from an undiagnosed and untreated mental health impairment which significantly impacted his judgement, decision-making and behavioural choices, are matters which bear upon the exercise of the Tribunal’s discretion. He argued that his deep remorse, both personal and for his clients, was another matter upon which he could rely in mitigation.
According to the applicant, the character witnesses spoke overwhelmingly of his honesty, integrity and trustworthiness and of his candour in admitting his wrongdoing, and therefore considerable weight should be placed on their evidence.
In relation to financial hardship, the applicant acknowledged that he would not suffer hardship by reference to some independent benchmark, such as the poverty line. However, he would suffer ‘personal hardship’ in that he might need to make decisions which would lead him to have to alter the network and community in which he lives, and in which his children go to school. He contended that this concern is not a desire to preserve a lifestyle but to protect his children and family from dislocation that would have a significant impact on his children, wife and family.
According to the applicant, in all the circumstances of this case, a banning order of less than 6 years and ‘something in the order of three or so years’ would be appropriate.
ASIC submitted that, based on the evidence, a lifetime ban is the correct or preferable decision. It contended that a short ban should be rejected as it would not reflect the serious and dishonest nature of the applicant’s conduct and would be contrary to the objectives of the Corporations Act and the principles set out in the ASIC’s Regulatory Guide 98 (‘RG 98’). It referred to a number of factors set out in RG 98 which, it argued, meant that a banning order of 10 or more years or a permanent ban was appropriate.[82] I discuss RG 98 further below under the heading ‘ASIC’s Regulatory Guide 98’.
[82] Those factors were: dishonest conduct; an intention to defraud; continued, knowing and wilful contraventions of the law … and disregard for legal obligations; significant adverse impact on confidence in or the integrity of the financial services industry; falsification, concealment or deliberate destruction of records; engaging in a pattern of persistent contraventions that indicates systemic failure or a general lack of understanding of and regard for compliance; providing unauthorised financial services; and providing ASIC with information that is false in a material particular or materially misleading, or omits material information.
ASIC argued that, by concealing his failure of the Exam, the applicant put his own interests ahead of those of his clients and colleagues. It contended that, whilst no clients suffered financial loss from his dishonesty, his clients were denied the opportunity to make an informed decision about his services and were placed in a position of unacceptable risk for three reasons. First, he continued to provide advice when he had failed the Exam, which assessed his competence to provide advice. Secondly, his mental health and the poor decision-making to which it contributed during the nine month period between 10 December 2021 and 29 August 2022 placed his clients at further risk where he ought to have recognised that he was not coping and should have ‘sought help or stepped away’. Thirdly, his conduct may have jeopardised Bluepoint’s insurance policy, leading to clients being unable to have the benefit of any policy coverage.
According to ASIC, while the applicant has great regret for his actions, he has on a number of occasions downplayed the seriousness of his conduct in a manner which indicated a lack of insight and undermines his expressions of remorse. ASIC submitted that what emerged from his cross-examination was the overwhelming sense that the decisions he made were not spur of the moment decisions but detailed and far more involved than they were initially presented to be. His decisions were said to be not just one or two snap decisions made in a panic but a series of deliberate and active choices made over nine months.
ASIC contended that, after falsifying his Exam Statement in order to buy himself time, the applicant never took the opportunity to come clean about what he had done. ASIC relied upon his admission that one of the reasons he did so was because he was too embarrassed to face Mr Bates. ASIC argued that each time he provided advice to retail clients after 1 January 2022, he was making a conscious decision to do something that he knew to be wrong. ASIC also argued that, while he was suffering from depression and anxiety, he was not wholly incapacitated and was capable of providing technically skilled advice and making rational decisions.
ASIC submitted that the applicant, having failed the Exam, could have continued to service a very significant number of his clients, being wholesale clients. It contended that the impact on Bluepoint’s business would have been minimal because he had only provided 11 pieces of advice to retail clients from 1 January 2022 until 29 August 2022. According to ASIC, there was no reason to believe that there would have been a sizeable impact on his family financially. ASIC argued that his stated motives for acting dishonestly must be considered in the context that there would have been minimal impact upon Bluepoint and him personally if he had acted honestly.
ASIC argued that the applicant’s financial circumstances disclosed that he was a man of significant wealth, with large amounts of equity in two houses. ASIC relied upon the fact that he and Ms Karamian had purchased luxury cars relatively recently. ASIC submitted that he could sell the family home in order to alleviate a lot of the financial pressures, and that any hardship he would suffer would be due to his wanting to maintain his current lifestyle. Accordingly, so it was said, financial hardship is not a factor to which the Tribunal should give any weight in the present case.
ASIC contended that a banning order was necessary to act as a deterrent to other industry participants, such that the public is more broadly protected. ASIC argued that in the face of the applicant’s misconduct, ‘anything less than a banning order would send a problematic message not only to other industry participants, but also to investors and consumers and would tarnish the credibility of the industry and the licensing regime’. According to ASIC, general deterrence is ‘perhaps the most important factor in this case’.
The findings I have already made are relevant to the issue of the duration of a banning order.
Factors I have already discussed which suggest a banning period towards the lengthy end of the spectrum include my findings in relation to: the applicant’s lengthy and continuous course of deliberate, serious and dishonest conduct which was predominantly motivated by self-interest; his serious contraventions of multiple financial services laws, and disregard for legal obligations; the material deficiency in his insight; the unsatisfactory level of his knowledge and ability, including in relation to professional ethics; his inadequate training and competence; and his incomplete understanding of the conflict of interest and breach of trust that his conduct involved. I will not repeat my prior discussion of these matters.
Factors I have already discussed which suggest a banning period towards the shorter end of the spectrum include my findings in relation to: the low risk of the applicant engaging in conduct such as forgery of a document or misleading ASIC in the future; his acceptance of responsibility and remorse; the further study he has undertaken since March 2023; the fact that his conduct did not cause any financial loss to any of his clients; and the fact that, although he benefitted financially from his wrongdoing, his financial benefit was not at the expense of anyone else – that is, he did not defraud anyone nor did he intend to disadvantage anyone. I will not repeat my prior discussion of these matters.
Although the applicant is remorseful and there is a low risk of him engaging in conduct such as forgery of a document or misleading ASIC in the future, specific deterrence remains a relevant consideration. That is because of my findings in relation to the material deficiency in his insight and incomplete appreciation of the conflict of interest and breach of trust that his conduct involved, as well as the unsatisfactory level of his knowledge of professional ethics.
General deterrence is particularly relevant in relation to the applicant’s lengthy and continuous course of deliberate, serious and dishonest conduct. The honesty of financial advisers and those who are officers or controllers of companies in the financial services industry lies at the heart of the integrity of the industry and of achieving the objectives of the ASIC Act and Chapter 7 of the Corporations Act. In order to uphold the integrity of the industry and those objectives, it is essential that the period of the banning order which is made in relation to the applicant is sufficiently lengthy to convey to others who are in the industry – or aspire to join it – that conduct of the type engaged in by him will result in a lengthy banning period, so as to deter them from engaging in such conduct.
Also relevant to the assessment of the length of a banning order is the applicant’s mental health issues in the period from 10 December 2021 until 29 August 2022. As I have already explained, although I am satisfied that those issues affected his thought processes during this period, those issues did not deprive him of the ability to distinguish between right and wrong or overbear him to the extent that he was not able to make deliberate choices.
I have also taken into account the financial and emotional impact of a banning order on the applicant and his family. Self-evidently, the longer the banning order, the greater the impact is likely to be. Having regard to the financial position of the applicant’s family as summarised at [‎115] to [‎127] above, whilst I am satisfied that the applicant’s family will suffer some financial challenges, I am not satisfied that they can be fairly described as ‘financial hardship’ in any conventional sense. Although the Banning Order has been in place for over 15 months, it has not resulted in any dramatic adverse financial consequences. This is borne out by the fact that the applicant and Ms Karamian entered into separate hire purchase agreements for expensive luxury vehicles after 29 August 2022 – and in the case of Ms Karamian, well after the Banning Order was made.[83]
[83] See [‎124] above.
The applicant’s family will experience financial and emotional pressures only if they wish to maintain their pre-Banning Order financial position and lifestyle without the need to sell any assets or change any aspect of their living and personal arrangements. He would be able to substantially reduce his family’s debts by appropriate financial and lifestyle adjustments such as selling part or all of his shareholding in Bluepoint, selling the apartment that is leased to his parents-in-law and driving less expensive vehicles. I accept that such adjustments will be difficult emotionally for him and his family and will cause some dislocation or upheaval. However, they will be a consequence of the need to make an appropriate banning order based upon all of the circumstances of the case in accordance with the applicable legal principles.
In summary, whilst the financial and emotional impact of a banning order is a relevant moderating factor in relation to the length of a banning order, it does not warrant substantial weight in the present case, particularly relative to the considerations referred to at [‎260], [‎262] and [‎263] above.
I have also taken into account the following matters in a manner favourable to the applicant in relation to the length of a banning order:
(a)his prior good record over many years, as set out at [‎32] above;
(b)the extensive favourable character evidence, which I have already discussed; and
(c)my conclusion about the breadth of the banning order under the heading ‘Scope of the Banning Order’ above.
It is not necessary for me to make a finding on ASIC’s submission that, by providing advice to retail clients after 1 January 2022, the applicant placed those clients at risk of not being able to make a claim on Bluepoint’s professional indemnity insurance. That is because the evidence on this issue was such that any finding would be speculative.
Balancing all of the considerations that are relevant to the length of a banning order, I am of the opinion that the appropriate length is 7 years from 9 March 2023. A banning order of that length is necessary to achieve the purposes of such an order set out in the applicable legal principles and the objectives of the Corporations Act and the ASIC Act. A banning order of that length – and of the scope already discussed – is necessary to protect the community and would be neither disproportionate nor impermissibly punitive in character.

In arriving at the above conclusion, I have had regard to other cases which the parties submitted have some similar features to the present case and are therefore capable of providing some guidance. Those cases have included Williams v ASIC,[84] George v ASIC,[85] Fraser v ASIC,[86] Lee v ASIC,[87] Dollas-Ford v ASIC,[88] JTMJ v ASIC,[89] Kofkin v ASIC,[90] Blazejczyk,[91] Atkins v ASIC,[92] Beckett v Tax Practitioners Board,[93] the Tarrant AAT Decision,[94] Hres v ASIC,[95] Lelliott v ASIC[96] and ASIC v McCormack.[97]
[84] [2018] AATA 2312 (‘Williams’).
[85] [2014] AATA 167 (‘George’).
[86] (2011) 125 ALD 121; [2011] AATA 944 (‘Fraser’).
[87] [2021] AATA 4048 (‘Lee’).
[88] (2006) 91 ALD 747; [2006] AATA 704 (‘Dollas-Ford’). See also Dollas-Ford v ASIC [2006] AATA 835, [26].
[89] [2010] AATA 350.
[90] [2009] AATA 660.
[91] [2020] AATA 3199.
[92] [2018] AATA 3223.
[93] [2021] AATA 1234.
[94] (2013) 62 AAR 192; [2013] AATA 926.
[95] (2008) 105 ALD 124; [2008] AATA 707.
[96] [2009] AATA 110.
[97] (2017) 160 ALD 155; [2017] FCA 672.
Whilst the cases upon which the parties relied have provided some assistance from the perspective that consistency in decision-making for similar cases is desirable, they have each turned on their own facts and circumstances and therefore the assistance has been limited. Prior Tribunal cases are not precedents to be applied or distinguished in the same way as court decisions in the judicial hierarchy. They cannot establish ‘tariffs’ which govern the outcome of future cases.[98] Nor can they justify the Tribunal reaching a decision in a specific case which is not the correct or preferable decision in that case.
[98] See also [‎284] below.
The main features of this case which have led me to conclude that a banning period of 7 years is the correct or preferable decision are not confined to the degree of the applicant’s dishonesty or the length of time over which it subsisted. Rather, they include all the matters I have discussed under the heading ‘Findings of fact and conclusion on the fit and proper person issue’, particularly the continuing material deficiency in the applicant’s insight concerning the nature and gravity of his conduct. Those matters do not lend themselves to meaningful comparison with any prior case. Accordingly, in the particular circumstances of this case, I do not consider that it is necessary to discuss in detail any of the cases upon which the parties relied. However, I note the following:
(a)In Williams, the Tribunal found that s 920A(1)(d) of the Corporations Act as it was worded in 2018 was not made out because, by the time of the hearing, Mr Williams had reformed and there was no longer any reason to believe that he was not of good fame and character.[99] A similar conclusion was reached in George,[100] Fraser[101] and Dollas-Ford.[102]
(b)In Lee, the personal hardship of Ms Lee, a single mother and sole breadwinner, was treated as a ‘significant factor’ that influenced the Tribunal’s decision to impose a banning order of 6 years.[103]
(c)In the Tarrant AAT Decision, the Tribunal concluded that a banning order in the range of 7 to 12 years would be appropriate for Mr Tarrant, who had breached various provisions of the Corporations Act. The Tribunal found that, although he had not acted dishonestly, he lacked insight into the gravity of his breaches.[104]
[99] [2018] AATA 2312, [51], [60].
[100] [2014] AATA 167, [80].
[101] (2011) 125 ALD 121, 129 [34]; [2011] AATA 944.
[102] (2006) 91 ALD 747, 756–7 [30]; [2006] AATA 704.
[103] [2021] AATA 4048, [40].
[104] Tarrant AAT Decision (2013) 62 AAR 192, 268 [376], 269 [378], 271 [387], 272 [388]; [2013] AATA 926.
In considering the cases upon which the parties relied, I have taken into account the fact that many of the individuals the subject of those cases were not able to call in aid to the same extent as the applicant:
(a)expert evidence about their mental health;
(b)a prior good record over many years; and
(c)extensive favourable character evidence.
Having considered all the cases upon which the parties relied, I am satisfied that both the scope of the banning order set out at [‎243] above and the period of 7 years from 9 March 2023 are:
(a)broadly consistent with other cases with similar features; and
(b)concordant with the well-known principle that like cases should be treated in a like manner.

ASIC’S REGULATORY GUIDE 98

RG 98 is dated November 2022 and titled ‘ASIC’s powers to suspend, cancel and vary AFS licences and make banning orders’. The cover sheet states that it is a ‘guide … for AFS licensees, their representatives, and advisers’. Page 2 states that RG 98 gives guidance to regulated entities by: explaining when and how ASIC will exercise its statutory powers; explaining how ASIC interprets the law; describing the principles underlining ASIC’s approach; and giving practical guidance. Page 2 also contains a disclaimer. It states that RG 98 does not constitute legal advice, that regulated entities should obtain their own professional advice on how the Corporations Act applies to them, and that examples used are purely for illustration and are not exhaustive.
Part C of RG 98 is headed ‘Banning orders’. It sets out a number of ‘key points’, including that the factors that ASIC will take into account whether to make a banning order will depend on the circumstances of each matter.
Table 2 in part C is headed ‘Key factors we consider in deciding whether to make a banning order’. The table contains two columns headed ‘Factors’ and ‘Relevant considerations’, respectively. The factors and some of the relevant considerations listed next to each factor are as follows.

Factors Relevant considerations

Nature and seriousness of the suspected conduct
·   Whether there is evidence that the contravention involved dishonesty or was intentional, reckless or negligent

·   The amount of any benefit gained or detriment suffered as a result of the misconduct

·   The amount of any loss caused to investors and consumers

·   The impact of the misconduct on the market, including potential loss of public confidence

·   Whether the conduct is continuing or likely to recur

·   Whether the person has a poor compliance record (e.g. they have previously engaged in misconduct)

·   Failing to manage a material conflict of interest

Internal controls ·   Whether the person complied with internal procedures

Conduct after the alleged contravention occurs
·   When and how the breach came to the attention of ASIC

·   The level of cooperation with [ASIC’s] investigation

·   Whether timely and effective remedial steps have been taken

·   Whether the person has been proactive in compensating client losses and in communicating with clients about the contravention

The expected level of public benefit

Likelihood that:

·   the person’s behaviour will change in response to a particular action; and/or

·   other industry participants will be deterred from engaging in similar conduct through greater awareness of the consequences

Mitigating factors
·   The extent to which there would be any personal hardship were a banning order to be made

·   Whether the misconduct relates to an isolated complaint

·   Whether investors or consumers have generally not suffered substantial detriment or been placed in a position of unacceptable risk

·   Whether the misconduct was inadvertent and the person undertakes to cease or correct the conduct

Table 3 in part C is headed ‘Factors and examples of conduct relating to specific periods of banning’. The table contains three columns headed ‘Outcome’, ‘Factors’ and ‘Examples of conduct (indicative only)’. The outcomes and some of the factors and examples of conduct listed next to each outcome are as follows.

Outcome Factors Examples of conduct (indicative only)

Banning for less than 3 years
·   Conduct is the result of carelessness or inadvertence

·   The person attempted to remedy the contravention and has fully cooperated with ASIC

·   No loss (or minimal loss) to client

·   Failing to notify ASIC about a representative's breach of the licensee's obligations

·   Failing to perform the functions of an officer of a financial services business

·   Failing to keep records that must be kept

Banning for 3–10 years
·   Conduct is inconsistent with the orderly operation of a financial market

·   Adverse impact on confidence in or the integrity of a financial market

·   False, misleading or deceptive, or unconscionable conduct

·   A deliberate course of conduct to enrich themselves at others' expense

·   Conduct shows incompetence, irresponsibility or a high level of carelessness, but with the possibility that the person may develop requisite skills and abilities

·   Disregard for the law and compliance with regulations

·   Carrying on a financial services business without holding an AFS licence

·   Controlling a financial services business without the requisite fitness and propriety

·   Failure by an officer of the licensee to ensure the licensee complies with its obligations

Banning for 10 or more years and permanent banning
·   Any dishonest conduct

·   Any intention to defraud

·   Continued, knowing and wilful contraventions of the law, including market integrity rules and disregard for legal obligations

·   Whether the person has previously contravened the law

·   Conduct shows serious incompetence and irresponsibility

·   Significant adverse impact on confidence in or the integrity of the financial services industry

·   Significant adverse impact on confidence in or the integrity of a financial market

·   Conduct is significantly inconsistent with the orderly operation of a financial market

·   Falsification, concealment or deliberate destruction of records required to be kept

·   Engaging in a pattern of persistent contraventions that indicates systemic failure or a general lack of understanding of and regard for compliance

·   Substantial or ongoing carrying on of a financial services business without holding an AFS licence

·   Providing unauthorised financial services

·   Providing ASIC with information that is false in a material particular or materially misleading, or omits material information

·   Failing to perform the functions of an officer of a financial services business

ASIC accepted that RG 98 is not a mandatory relevant consideration. However, relying upon the Tarrant AAT Decision,[105] ASIC submitted that the Tribunal should apply RG 98 unless there are cogent reasons not to do so. ASIC conceded that RG 98 is simply a guide and emphasised that, while the Tribunal should have regard to it, the Tribunal can decide in a particular case that RG 98 was not of any assistance.
[105] (2013) 62 AAR 192, 199–200 [18]–[21]; [2013] AATA 926.
The applicant submitted that it is not mandatory for the Tribunal to have regard to RG 98 and that other comparable cases provide better guidance to the Tribunal than RG 98 in making the correct or preferable decision.
In GJDB v Minister for Immigration, Citizenship and Multicultural Affairs, I stated that there are many types of government policies with potentially different consequences for decision-making by the Tribunal.[106] I went on to discuss the following three types of policies:
(a)Policies of the type discussed by Brennan J in Drake v Minister for Immigration and Ethnic Affairs (No 2),[107] which seek to provide guidance to public officers about how they should exercise a broad discretion conferred by a statutory instrument. In respect of such policies, Brennan J went on to say that if the Tribunal is satisfied that the relevant policy is valid, it should adopt a practice of applying the policy unless there were cogent reasons to the contrary.[108] I expressed the approach relating to this type of policy as follows:
If the Tribunal is satisfied that the policy is valid and consistent with the statute, ordinarily the Tribunal would be expected to apply the policy provided that the Tribunal had regard to the particular circumstances of each case and considered whether those circumstances gave rise to cogent reasons for not applying the policy.[109]
(b)Policies that seek to provide guidance to public officers by stipulating that a particular interpretation of a statutory provision is the correct interpretation and requiring public officers to adopt that interpretation. I stated the following in relation to such policies:
Such a policy cannot bind the Tribunal, as a government policy cannot control the meaning of a statute. The Tribunal is obliged to form its own view about the correct interpretation of statutory provisions. The Tribunal may consider any explanation in the policy about why the asserted interpretation is correct and may adopt it if it is persuaded by that explanation and concludes that it is preferable to all alternative interpretations that are argued before it. In such a case, the Tribunal reaches its own view about the correct or preferable interpretation of the provision after taking into account not only the policy but all other submissions and matters before it that are relevant to the interpretation of the provision.[110]
(c)Policies that seek to provide guidance to public officers by setting out a process of reasoning they must follow in deciding whether they are satisfied that a particular statutory requirement is met. I stated the following in relation to such policies:
Such a policy cannot bind the Tribunal, as the Tribunal is obliged to form its own view about the correct or preferable process of reasoning it should follow. In performing its task, the Tribunal must give an active intellectual consideration of the material before it in a fulsome way, and not only in accordance with a structure imposed on the decision-maker by an executive policy. The Tribunal may consider the logic underpinning the process of reasoning set out in the policy and may adopt it if it is persuaded by it and concludes that it is preferable to all alternative processes of reasoning that are argued before it. In such a case, the Tribunal reaches its own view about the correct or preferable process of reasoning to determine whether it reaches a state of satisfaction after taking into account not only the policy but all other submissions and matters before it that are relevant to whether it should reach the state of satisfaction.[111]
[106] [2023] AATA 3245, [19] (‘GJDB’).
[107] (1979) 2 ALD 634 (‘Drake (No 2)’).
[108]         Drake (No 2) (1979) 2 ALD 634, 645.
[109]         GJDB [2023] AATA 3245, [20].
[110]         GJDB [2023] AATA 3245, [22] (citations omitted).
[111]         GJDB [2023] AATA 3245, [23] (citations omitted).
Although RG 98 has some features of the third type of policy, it does not neatly fit any of the above three types of policies. It does not fall within the first type because its purpose is expressed as providing guidance to financial advisers rather than to officers empowered to make decisions under s 920A(1) of the Corporations Act. Considered as a whole, RG 98 is in the nature of an educational document to assist financial advisers to understand their legal obligations and the regulatory measures ASIC may adopt in enforcing compliance with those obligations.
Tables 2 and 3 of RG 98 set out in summary form some of the considerations that the Tribunal and courts have taken into account in reaching particular types of outcomes in relation to banning orders. To the extent that those tables accurately and conveniently summarise those considerations, they can provide some guidance in relation to possible outcomes that may result from particular types of conduct. However, the cases from which the considerations are derived are more reliable than the tables. Moreover, neither the tables, nor RG 98 as a whole, set out precise legal principles or criteria that can be ‘applied’ in reaching the correct or preferable decision in any particular case. Indeed, the three distinct banning periods in table 3, each with its own factors and examples – which are neither exhaustive nor mutually exclusive – create a risk of a formulaic ‘tick box’ approach to decision-making. They may also give the false impression that the duration of a banning order can be determined by reference to established ‘tariffs’ or assessed with scientific precision. These notions are fundamentally at odds with case by case merits review, which must necessarily be governed by the facts and circumstances of each proceeding.
It follows from the above analysis that, to the extent that Kerr P and Redfern SM expressed a different view in the Tarrant AAT Decision, I respectfully disagree.[112] In my opinion, RG 98 is not the kind of policy that falls within the first type described at [‎282(a)] above, in respect of which Brennan J said in Drake (No 2) that the Tribunal should apply it unless there are cogent reasons to the contrary.
[112] See Tarrant AAT Decision, (2013) 62 AAR 192, 200 [21]; [2013] AATA 926.
In the present case, I have had regard to RG 98 as part of the material before me but have not ‘applied’ it in any sense. I have been able to reach the conclusions set out earlier in my reasons simply by applying the legal principles I have summarised to the findings I have made based upon the evidence and the parties’ submissions.

CONCLUSION

For the reasons set out above, I am satisfied that the power to make a banning order is enlivened under paras 920A(1)(d), (da) and (e) of the Corporations Act, and that a banning order should be made which has the same scope as the Banning Order, except that its duration should be 7 years from the date the Delegate’s Decision was given to the applicant, namely, 9 March 2023. I am also satisfied that the Banning Order contains a typographical error that should be corrected.

DECISION

Pursuant to s 43(1)(b) of the Administrative Appeals Tribunal Act 1975, the Tribunal varies the decision under review by substituting ‘for 7 years commencing on 9 March 2023’ for ‘permanently’ and ‘one or more’ for ‘one of more’.
I certify that the preceding 288 paragraphs are a true copy of the written reasons for the decision of the Hon Justice Kyrou, President
....................[SGD]..............................
Associate:
Dated: 25 June 2024
Dates of hearing:  20, 21 and 22 May 2024
Counsel for the Applicant:   Dr G O’Mahoney and Mr A Flick
Solicitors for the Applicant:  O’Loughlin Westhoff
Counsel for the Respondent:  Ms FJ Bentley
Solicitors for the Respondent:  Australian Securities and Investments        Commission

Factors	Relevant considerations
Nature and seriousness of the suspected conduct	· Whether there is evidence that the contravention involved dishonesty or was intentional, reckless or negligent · The amount of any benefit gained or detriment suffered as a result of the misconduct · The amount of any loss caused to investors and consumers · The impact of the misconduct on the market, including potential loss of public confidence · Whether the conduct is continuing or likely to recur · Whether the person has a poor compliance record (e.g. they have previously engaged in misconduct) · Failing to manage a material conflict of interest
Internal controls	· Whether the person complied with internal procedures
Conduct after the alleged contravention occurs	· When and how the breach came to the attention of ASIC · The level of cooperation with [ASIC’s] investigation · Whether timely and effective remedial steps have been taken · Whether the person has been proactive in compensating client losses and in communicating with clients about the contravention
The expected level of public benefit
Likelihood that: · the person’s behaviour will change in response to a particular action; and/or · other industry participants will be deterred from engaging in similar conduct through greater awareness of the consequences
Mitigating factors	· The extent to which there would be any personal hardship were a banning order to be made · Whether the misconduct relates to an isolated complaint · Whether investors or consumers have generally not suffered substantial detriment or been placed in a position of unacceptable risk · Whether the misconduct was inadvertent and the person undertakes to cease or correct the conduct

Outcome	Factors	Examples of conduct (indicative only)
Banning for less than 3 years	· Conduct is the result of carelessness or inadvertence · The person attempted to remedy the contravention and has fully cooperated with ASIC · No loss (or minimal loss) to client	· Failing to notify ASIC about a representative's breach of the licensee's obligations · Failing to perform the functions of an officer of a financial services business · Failing to keep records that must be kept
Banning for 3–10 years	· Conduct is inconsistent with the orderly operation of a financial market · Adverse impact on confidence in or the integrity of a financial market · False, misleading or deceptive, or unconscionable conduct · A deliberate course of conduct to enrich themselves at others' expense · Conduct shows incompetence, irresponsibility or a high level of carelessness, but with the possibility that the person may develop requisite skills and abilities · Disregard for the law and compliance with regulations	· Carrying on a financial services business without holding an AFS licence · Controlling a financial services business without the requisite fitness and propriety · Failure by an officer of the licensee to ensure the licensee complies with its obligations
Banning for 10 or more years and permanent banning	· Any dishonest conduct · Any intention to defraud · Continued, knowing and wilful contraventions of the law, including market integrity rules and disregard for legal obligations · Whether the person has previously contravened the law · Conduct shows serious incompetence and irresponsibility · Significant adverse impact on confidence in or the integrity of the financial services industry · Significant adverse impact on confidence in or the integrity of a financial market · Conduct is significantly inconsistent with the orderly operation of a financial market	· Falsification, concealment or deliberate destruction of records required to be kept · Engaging in a pattern of persistent contraventions that indicates systemic failure or a general lack of understanding of and regard for compliance · Substantial or ongoing carrying on of a financial services business without holding an AFS licence · Providing unauthorised financial services · Providing ASIC with information that is false in a material particular or materially misleading, or omits material information · Failing to perform the functions of an officer of a financial services business