McCormack and Australian Securities and Investments Commission

The Administrative Appeals Tribunal considered an appeal by Mr McCormack against a decision by the Australian Securities and Investments Commission (ASIC) to ban him from providing financial services for five years. The dispute arose from Mr McCormack's engagement in misleading or deceptive conduct in relation to a financial product or service, a breach of section 1041H of the Corporations Act 2001 (Cth).

The Tribunal was required to determine whether a banning order against Mr McCormack was the preferable decision. Specifically, it had to consider whether such an order would serve the purposes of protecting the public, deterring similar conduct, and maintaining investor and consumer confidence in financial markets.

The Tribunal found that while Mr McCormack had breached section 1041H, the circumstances of his offending were highly unusual and unlikely to be replicated. Consequently, a banning order would not protect the public or deter future misconduct, nor would it maintain investor confidence as the conduct had not affected it. The Tribunal noted that no financial detriment was suffered by any person. It concluded that the sole purpose of a banning order in this case would be to penalise Mr McCormack, which is an inappropriate purpose for such an order.

Accordingly, the Tribunal set aside ASIC's decision to ban Mr McCormack, finding it was not the preferable decision. The Tribunal ordered that ASIC must treat Mr McCormack as if no banning order had ever been made against him, and his name was to be removed from the register of persons against whom banning orders have been made.