The Administrative Appeals Tribunal (AAT) has reduced the period and scope of the ban imposed by the Australian Securities & Investments Commission on former Melbourne-based financial adviser Ashok Sherwal.
The Australian Securities & Investments Commission (ASIC) initially banned Sherwal on June 11, 2021, from providing financial services and performing any function in a financial services business for six years.
However, on December 7, 2022, the AAT reduced the banning period to five years and the scope of the ban to the provision of financial services and the performance of any function as an officer or manager of an entity carrying on a financial services business.
The AAT found that Sherwal failed to act in his client’s best interests, advising them to place new superannuation-funded insurance as part of their participation in a cash rebate procedure. It also found that Sherwal failed to prioritise his client’s interests in the advice he gave, and there were instances of inappropriate advice and failure to comply with the additional requirements of advice that recommended replacing one product with another.
Still, the appeals tribunal decided to amend the period and scope of the ban because “some aspects of ASIC’s decision reasoning were misconceived, and the cash rebate procedure was not itself unlawful.” It deemed Sherwal a “proper” person to provide financial services, but he failed to discharge his basic obligations and demonstrated a lack of reliable care and attention regarding his client’s affairs.
In a statement, ASIC said it is considering the AAT’s decision. The corporate watchdog continues to monitor other financial advisers and financial service providers and most recently sued a Finder.com subsidiary for alleged unlicensed product and inadequate risk disclosure over a product.
