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Failure in Compliance Oversight

Friday 30 July 2021


Two years since the Australian Securities and Investments Commission (ASIC) commenced proceedings against Tidswell, the federal court has found has failed to meet its obligations under s 912A(1)(a) of the Corporations Act 2001 (Cth). 

According to the judgement from the Federal Court of Australia:

The court declares pursuant to s 21 of the Federal Court of Australia Act 1976 (Cth) that Tidswell contravened s 912A(1)(a) of the Corporations Act 2001 (Cth) by failing to do all things necessary to ensure that the financial services provided by Tidswell and covered by its Australian Financial Services Licence (licence number 237628) in relation to the MobiSuper Division of the Tidswell Master Superannuation Plan (the MobiSuper Fund) (that is, the issue by Tidswell of interests in the MobiSuper Fund), were provided efficiently, honestly and fairly, in that during the period between at least 30 November 2016 and 14 February 2018

The court found that Tidswell failed to take adequate steps evaluate the MobiSuper’s reporting under the first promoter agreement. 

This included failure to properly evaluate marketing online activities of MobiSuper. 
The RSE Licensee company failed to properly monitor the activities around the call centres and customer service operators. 

They did not oversee MobiSuper’s training supervision for customer service operators. 
And failing sending compliance team to monitor for MobiSuper reporting under the promoter agreement or properly overseeing training of the customer service operators
 
Commenced Proceedings
In 2019 the Australian Securities and Investments Commission (ASIC) commenced proceedings focused on a division of Tidswell Master Superannuation Plan:

In a formal statement from the regulator, they indicated that they were focused on taking action against:

  • Tidswell Financial Services Ltd (Tidswell), an Australian financial services (AFS) licensee and superannuation trustee;
  • MobiSuper Pty Limited (Mobi), the promoter of the MobiSuper Fund;
  • Mobi’s AFS licensee ZIB Financial Pty Limited (ZIB); and
  • Andrew Richard Grover, a director of Mobi and ZIB.
At the time the regulator indicated that it was concerned that Tidswell might not have meeting al, of the of its obligations in accordance with the Corporations Act, “ASIC is concerned that Tidswell and ZIB failed to do all things necessary to ensure the financial services covered by their respective AFS licences were provided efficiently, honestly and fairly. ASIC also alleges that both Tidswell and ZIB failed to adequately monitor Mobi’s promotion of the Fund through a purported ‘general advice model’ that had insufficient regard for consumers’ best interests. Further, ASIC alleges false and misleading statements were made about superannuation, insurance products and services.”

The specific civil penalties that the securities and investment the regulator was seeking against Tidswell according to their formal release two years ago:

  • Tidswell and ZIB for advice given to consumers by Mobi CSOs in breach of the best interest obligations;
  • Mobi and Mr Grover for the misleading internet advertising campaigns; and
  • Mobi for the false and misleading claims made by CSOs during marketing calls.