ASIC bans Olive Financial Markets’ director from providing financial services

The Australian Securities and Investments Commission (ASIC) today announced several developments concerning its actions against Olive Financial Markets Pty Ltd.

Let’s note that, between 2013 and 2018 (the relevant period), Olive operated the following businesses:

• a managed discretionary account (MDA) service conducted through Olive’s authorised representatives Share Express Pty Ltd, Markets Pty Ltd and Investor Centre Australia Pty Ltd, which traded in CFDs over equities, commodities, indices and Forex; and
• a superannuation rollover business, conducted through Olive’s authorised representatives Camori Pty Ltd, Ricarmo Pty Ltd and Paradise Financial Group Pty Ltd, which involved clients being cold-called and advised to roll over their superannuation from their existing fund to be managed by Olive on either the Hub24 or Netwealth Investments platform.

Today, ASIC said it cancelled the Australian financial services (AFS) licence of Olive amid concerns that it had not complied with its obligations as an AFS licensee and that it was likely that Olive would contravene its obligations in the future.

In particular, the regulator has found that Olive:

• failed to ensure that it provided financial services efficiently, honestly and fairly;
• engaged in unconscionable conduct;
• engaged in misleading or deceptive conduct and made false or misleading statements;
• contravened the hawking prohibitions by making unsolicited calls to potential clients;
• failed to take reasonable steps to ensure that its representatives complied with their obligations to act in the best interests of clients, and their obligations not to make false or misleading statements or engage in misleading or deceptive conduct;
• did not comply with obligations to ensure that its representatives were adequately trained and competent; and
• did not have a compliant dispute resolution system.

Olive applied to the AAT on March 17, 2020 for a review and stay of ASIC’s decision to cancel the AFS licence. On April 23, 2020, the AAT granted a stay of ASIC’s decision to cancel the AFS licence until the AAT reviews ASIC’s decision, subject to conditions including:

• Olive not accepting any new clients while the stay is in effect; and
• Olive notifying its current clients of ASIC’s decision to cancel its AFS licence, the AAT’s stay of the cancellation pending its review of ASIC’s decision, and that Olive is able to continue providing financial services until the review is determined.

A separate ASIC decision to ban Olive’s former director, Scott John Morrison, from providing financial services for seven years, took effect from April 3, 2020. Mr Morrison, of Ryde, NSW, was Olive’s sole director between 20 February 2013 and 13 November 2019.

ASIC found that Mr Morrison:

• failed to act in the best interests of Olive’s clients;
• is not competent to provide financial product advice;
• is likely to contravene a financial services law; and
• was involved in certain contraventions by Olive where it engaged in misleading or deceptive conduct and made false or misleading statements.

Mr Morrison has not appealed the ban to the AAT.