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ASIC has banned a Sydney broker after discovering financial irregularities in his company.
The regulator announced last week that Warren Douglas Gelle has been banned from providing financial services for three years, although he has the right to appeal.
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Mr Gelle was a responsible manager and director of WD Gelle Insurance & Finance Brokers.
He was banned after ASIC found that he failed to properly monitor compliance of WD Gelle's obligations as an AFS licencee.
ASIC cancelled the firm’s AFS licence in April 2014 after an investigation discovered that it “failed to forward amounts received as client premiums to insurers”.
According to ASIC, “there were shortfalls between the amounts received from customers and the amounts which should have been held in trust by the company on behalf of those customers”.
Vero Insurance filed a winding-up application against WD Gelle in July 2013, but the application was withdrawn in October 2013, ASIC records reveal.
Records also show that WD Gelle briefly entered and then swiftly exited receivership in August 2011.
A winding-up application was also filed against the company in September 2012 but withdrawn the following month.
ASIC deputy chairman Peter Kell said the banning of Mr Gelle should send a clear message that compliance failures will result in removal from the financial services industry.
However, large numbers of brokers are convinced that the regulator applies different rules to different members of the industry.
According to a poll on The Adviser last year, 74 per cent of respondents believe that ASIC treats brokers differently from lenders.
Former ASIC investigator David Carson recently told The Adviser that it is wrong to suggest the regulator isn’t fair.
He said that while penalties against rogue brokers are almost always proportionate, they can sometimes appear “very harsh” because ASIC is unable to publicise all the relevant information.
He also said that while ASIC has no sympathy for compliance breaches by lenders, it’s clearly harder to crack down on major institutions.
“Administrative action against a smaller entity is certainly more straightforward since suspending the licence of a two-person firm with a few hundred clients has fewer indirect consequences than, say, suspending the licence of an entity that employs many staff and has thousands of clients,” he said.
[Related: ASIC set to get tough in 2015, says compliance expert]
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