Welcome to our Regulatory Highlights for June 2026.
ASIC Highlights
Directors fined for failing to have director identification numbers
Two NSW-based directors were convicted and fined $10,000 each for failing to have their director IDs.
From 5 April 2022, new directors must obtain their director IDs before being appointed. A failure to comply with this requirement can attract a maximum penalty of 60 penalty units, being $19,800.
Prohibition of advertising of superannuation funds during employee onboarding processes
A new ban will take effect on 1 July 2026 to prohibit advertisement of superannuation funds during the employee onboarding process.
ASIC has emphasised that it is likely to focus enforcement actions towards “serious or reckless” misconduct, not where businesses have made honest attempts to comply with the new requirements.
Former responsible manager permanently banned for conflict of interest management failures
ASIC has permanently banned Mr Gerard Duffy, the former responsible manager of Brite Advisors Py Ltd (Brite), from providing financial services, as the regulator has reasons to believe that Mr Duffy is not a fit and proper person.
Mr Duffy failed to disclose to ASIC about his employment at AFCA during an s 19 examination. He also failed to inform AFCA about his relationship with Brite. ASIC considered that Mr Duffy’s actions suggest his lack of integrity and honesty, and therefore would not be a fit and proper person.
RG 234 Advertising financial products and services updated
RG 234 has finally been updated since it was first released in 2012, to reflect regulatory and enforcement actions relevant to advertising activities. The updated guide has also consolidated RG 53 The use of past performance in promotional material.
RG 234 is now the only guidance regarding advertising.
ASIC v Diamond Wheels: Car dealership found to have engaged in unlicensed credit activities
The Federal Court has found that Diamond Wheels Pty Ltd (trading as Lansvale Motor Group) and Keo Automotive Pty Ltd provided consumer car loans without a credit licence and charged consumers interest rates that were excessive and unlawful.
A director of Keo Automotive and former director of Diamond Wheels was found liable for his involvement in the two businesses, having played “a central role” in the establishment of the businesses.
This was ASIC’s first civil proceeding against a car dealership to tackle unlicensed credit activities.
ASIC v USG: $300m penalties against the licensee and two CARs
The Federal Court has ordered, among other things, record penalties against Union Standard International Group Pty Ltd (USG) and its two former authorised representatives – Maxi EFX Global AU Pty Ltd (trading as EuropeFX) and BrightAU Capital Pty Ltd (trading as TradeFred) – for contraventions, including providing personal advice without the relevant authorisations under an AFSL, making false and misleading representations, engaging in misleading or deceptive conduct and systemic unconscionable conduct, between 2018 and 2020:
- USG: $156.7 million
- EuropeFX: $114.1 million
- TradeFred: $29.4 million
Notably, this was the first civil penalty imposed on an entity (USG) for its failure to ensure its financial services were provided ‘efficiently, honestly and fairly’ by actively marketing and issuing CFDs to customers in China, when it knew, or ought to have known, the customers were exposed to potential liability for breaching the local law in China.
The judgment can be found here.
Websites of financial services businesses to be included in the ASIC professional registers
In an attempt to fight against imposter scams in financial services, ASIC is collecting and publishing the website addresses of AFSL holders and has invited more than 6,500 licensees to share their website details.
The website addresses of authorised representatives are not included in the process, although licensees can publish the relevant information on their own sites.
ASIC v Bekier: Former Star executives disqualified and ordered to pay penalties
Mr Mathias Bekier (former Chief Executive Officer and Managing Director) and Ms Paula Martin (former General Counsel, Company Secretary and Chief Legal and Risk Officer) of Star Entertainment Group Limited have been penalised for breaching their duties in their handling of risks relating to money laundering and criminal activities:
- Mr Bekier: $700,000 in pecuniary penalty and disqualification from managing corporations for six years.
- Ms Martin: $400,000 in pecuniary penalty and disqualification from managing corporations for seven years.
Justice Lee was particularly critical of the lack of evidence “demonstrating developed insight into the seriousness of the contraventions” of Mr Bekier or Ms Martin.
His Honour remarked that Ms Martin, as an experienced solicitor, “her expressions of regret were noticeably qualified by that lack of intention to cause harm to Star or expose it to any regulatory or reputational risks … Ms Martin’s evidence stopped short of directly acknowledging the essential character of what occurred.” Her “evidence remained framed largely in terms of inadvertence, insufficient attention or failure to appreciate consequences, rather than candid, acceptance of the true character of the conduct” ([243]).
His Honour emphasised the importance of general deterrence. “Senior legal and governance officers within major corporations must understand that failures involving misleading communications and inadequate discharge of legal oversight responsibilities may attract serious personal consequences” (Penalty Judgment, [235]).
The penalty judgment can be found here.
ASIC v Web3 Ventures Pty Ltd: Earner a financial product
The High Court unanimously held that the Earner product, which provided fixed yield to investors, was a financial product, and that Block Earner required an AFSL. In particular, the Court found that:
- Earner was a financial product requiring the coverage of an AFSL, as it is a facility through which an investor made a financial investment.
- Earner was a derivative, as the amount returned to investors fluctuated and was derived by reference to the value of the digital assets and the exchange rates.
Importantly, the fact that the returns to the investors were fixed, regardless of whether Block Earner made any profits, does not prevent the product from being captured by s 763B(a).
‘The text of s 763B(a) does not confine the way in which a contribution may be used to generate a financial return “for” the investor. For example, there is nothing in the text of s 763B(a) that suggests that the “financial return, or other benefit” must be only for the investor… In any profit-making investment business, the business uses the funds invested to generate a return both for it, and for its investors’ ([48]).
The Court also rejected the contention that there must be a link between the user’s contribution and the return generated by Block Earner which required the user to have right or interest in Block Earner’s downstream activities ([53]):
- It is sufficient under s 763B(a)(iii) that the other person intends for the contribution to be used to ‘generate a financial return or other benefit for the investor’, regardless of ‘the way in which the other person uses the funds provided by an investor’ ([54]).
- The structure of Chapter 7 of the Corporations Act and its object would be undermined if ‘the investor must have some right or interest in the downstream activities of the other person’s business’ ([55]).
The judgment can be found here.
ASIC v HSBC: $35m penalty ordered for scam protection failures
The Federal Court has ordered HSBC Bank Australia Limited (HSBC) to pay a penalty of $35 million for its scam protection failures:
- Failure to have adequate prevention and detection controls to manage customers’ exposure to unauthorised payments, and therefore failed to do all things necessary to ensure that the financial services and credit services covered by its AFSL and ACL were provided efficiently, honestly and fairly under ss 912A(1)(a) and (5A) of the Corporations Act and ss 47(1)(a) and (4) of the Credit Act respectively: $10 million.
- Systemic and widespread failures relating to the ePayments Code, in contravention of ss 912A(1)(a) and (5A) of the Corporations Act and ss 47(1)(a) and (4) of the Credit Act: $22.5 million.
- Failure to have adequate system or process to reinstate customers’ access to their accounts within a reasonable time after restricting customers’ partial or full access to their accounts: $2.5 million.
In assessing the appropriateness of the penalties jointly proposed by the parties, Justice Bennet took note of HSBC’s cooperation throughout the investigation processes, admission of the contraventions, a large-scale remediation program and the apology proffered.
The judgment can be found here.
CDPP v Fairfull: Person sentenced
David Fairfull, the former CEO of an AI marketing business, has been sentenced to 9 years of imprisonment with the following details, with 18 months of the sentence to be served concurrently:
- Making false and misleading statements to investors: 7.5 years.
- Dishonest use of his position as a director: 3 years.
The offences relate to multiple fundraises totalling more than $39 million based on Mr Fairfull’s sustained and repeated misleading statements. He later dishonestly used his position as a director to cause $7.7 million to be lent by the business to fund the purchase of residential real estate for his personal benefit.
The case was prosecuted by the Commonwealth Director of Public Prosecution as a result of ASIC investigations.
ASIC Chair Sarah Court highlighted that misconduct related to directors’ duties is an enduring enforcement priority for the agency.
The judgment can be found here.
Car finance providers and distributors on notice
ASIC has identified various concerns relating to distributor arrangements, sales practices and monitoring of consumer outcomes, including:
- Gaps in some lenders’ oversight of distributors, such as brokers and car dealers.
- Excessive fees.
- Inconsistent hardship support.
Lenders are reminded that responsibility for consumer outcomes cannot be outsourced.
Extension of no-action position for digital asset businesses to 30 September 2026
ASIC has issued an updated no-action letter to allow digital asset businesses providing financial services an extra 3 months (till 30 September 2026) to apply for or vary an AFSL, with an expansion in the scope of the no-action position to cover those operating under, or entering into AR arrangements or intermediary authorisation arrangements with an AFSL holder.
The above extension also covers businesses requiring Australian Market Licences or Clearing and Settlement Facility Licences, including requirements to provide ASIC with a written notification of their intention to apply and hold a pre-meeting with the regulator.
The updated ASIC no-action letter can be found here.
ASIC v Paul Chiodo & ORS: Former Keystone Asset Management directors and Compliance Committee members over alleged Shield failures
ASIC has commenced proceedings against the following former personnel of Keystone Asset Management (Keystone):
- Former directors: Paul Chiodo, Ilya Frolov and Mark Yorston for allegedly breaching their director and officer duties.
- Former compliance committee members: Jeremy Danon and Mr Frolov for allegedly failing to meet their obligations.
The retirement savings of approximately 5,800 investors totalling more than $530 million were invested in the Shield Master Fund.
ASIC alleges that:
- Approximately $305 million of $530 million was transferred to a related property fund controlled by Keystone, before being transferred to entities associated with Mr Chiodo and Mr Frolov.
- The transfers were carried out without basic safeguards, including security, valuations, oversight or conflict management.
- The funds were used for unauthorised purposes, without a sufficient connection to the intended property development initiatives, including payments to related parties and third parties without the required prior approval of scheme managers.
- Failures to comply with the Shield Compliance Plan by failing to obtain valuations of the Shield assets and manage conflicts of interest involving Mr Chiodo and Mr Frolov.
The Statement of Claim can be found here.
The Originating Process can be found here.
ASIC puts platform trustees on notice about persistent failures to safeguard super savings
ASIC warns superannuation trustees about their striking and persistent failures to protect superannuation savings, after reviewing 6 platform trustees managing over $300 billion of retirement savings. The areas that require immediate attention include:
- Persistent gaps in advice fee controls.
- Limited checks of advice documents.
- Insufficient attention paid to understanding the advice licensees’ business models.
- Insufficient monitoring of key risk indicators.
Report 833 Safeguard super: How well are platform trustees monitoring risks to retirement savings? Can be found here.
ASIC v Mercer Super: $10.3 million in penalty for systemic reportable situations failures
The Federal Court has ordered Mercer Super to pay $10.3 million in penalties for its systemic failures in managing its reportable situations obligations. In particular:
- Mercer’s compliance systems were inadequate and thereby failed to do all things necessary to ensure that its financial services were provided efficiently, honestly and fairly.
- Mercer contravened its reportable situation obligations by failing to submit the reports within the required timeframe or not submitting the reports at all, and by failing to take all reasonable steps to ensure that various reports were not materially false or misleading because of statements contained in those reports.
Importantly:
- Mercer’s systems did not record the key information on investigations, including the commencement dates, the duration, and when the 30-day mark was reached or when a report would be due to ASIC. Data integrity issues also gave rise to the risks of information being overridden ([23]).
- The fact that the management was on notice of the risks of breaching its reportable situations obligations acted as a significant aggravating factor ([28]).
- The management incorrectly understood the commencement of an investigation ([25]).
The judgment can be found here.
Giuseppe DeFrancesco: Credit-defeating criminal charges
Giuseppe DeFrancesco has been charged with three offences relating to his conduct as an employee of Jasa Dining Pty Ltd (in liquidation) between August 2023 and June 2025. The allegations were:
- He dishonestly used his position as an employee to redirect $935,000 of the sale proceeds of Jasa Dining to himself, to the detriment of the restaurant’s creditors in contravention of s 184(2) of the Corporations Act.
- He procured, incited, induced or encouraged the restaurant to redirect a further $96,793 of the sale proceeds in contravention of s 588GAC(1) of the Corporations Act.
- He offered a person $50,000 to induce them as a witness in a federal court proceeding to withhold true testimony, contrary to s 37(3) of the Crimes Act.
Notably, a director’s duty to prevent any creditor-defeating disposition is engaged when the company is insolvent or becomes insolvent due to one or more dispositions of its property or assets. This duty extends to persons involved in or encouraging such dispositions.
AUSTRAC Highlights
New AUSTRAC Online reporting forms
The new threshold transaction report and suspicious matter report forms are now available on AUSTRAC Online from 1 July 2026 to simplify the reporting experience.
Existing reporting entities enrolled with AUSTRAC on or before 30 March 2026 have the option to continue using the old forms till 30 March 2029.
AUSTRAC Online users can explore the new forms within the training environment.
Virtual Asset Service Provider (VASP) register goes public
AUSTRAC has recently made the VASP register public, allowing the general public to verify the registration status of virtual asset-related businesses.
‘BAR’ and Australian Transaction Reports and Analysis Centre (Freedom of information) [2026] AICmr 44
The Information Commissioner (IC) has recently completed a review of a Freedom of Information request originally made to AUSTRAC and concluded that the regulator was justified to refuse access.
The relevant events are summarised below:
- 28 June 2022: The applicant made an application to AUSTRAC under the FOI Act to access ‘… a copy of all the information that relates or refers to me that is held by AUSTRAC’.
- July 2022: AUSTRAC commenced the consultation process, stating that processing the request would involve ‘a substantial and unreasonable diversion of AUSTRAC resources’, and suggested ways how the applicant could narrow down the scope of the request. The applicant’s last version of the request was amended to cover ‘all computerised documents that contain information that relates to me that is held (possessed) by AUSTRAC’.
- August 2022: AUSTRAC refused access under s 24AA(1)(a)(i), and the applicant sought internal review of the decision.
- 21 September 2022: AUSTRAC decided to affirm the original decision.
- 17 October 2022: The applicant sought Information Commissioner (IC) review of the internal review decision.
- 18 June 2026: FOI Commissioner Alice Linacre held that AUSTRAC was authorised to refuse access as it has established that a practical refusal reason exists for the purposes of s 24AA(1)(a)(i).
Notably:
- AUSTRAC provided the OAIC with confidential material, including material that AUSTRAC considered to be exempt under the FOI Act, and also shared an open version of the submissions with the applicant. AUSTRAC further explained that the documents are complex and some of them would require consultation with third parties.
- The IC considered the applicant’s request ‘very broad’ and accepted that AUSTRAC’s resources are limited, especially in light of the large volumes and types of documents identified in AUSTRAC’s confidential submissions. The IC also accepted that AUSTRAC would have to consult with third parties in relation to the possible release of their information under the request.
- The IC concluded that AUSTRAC has established a practical refusal reason and was authorised to refuse access.