Pershing Securities Australia gets fined for breaching client money obligations

Maria Nikolova

Pershing Securities Australia Pty Ltd is the first company in Australia to be convicted of criminal offences for breaching client money provisions.

Pershing Securities Australia Pty Ltd (PSAPL) has been sentenced in Sydney’s Downing Centre Local Court to pay a total penalty of $40,000 after pleading guilty to breaching client money obligations.

PSAPL pleaded guilty to breaching s993C(1) of the Corporations Act 2001 (the Act) and Regulation 7.8.01(1) of the Corporations Regulations 2001 by transferring sale proceeds from international trading in client’s securities from trust accounts into PSAPL’s general bank account, over a period of approximately 424 days between 1 March 2016 and 20 December 2017.

PSAPL also pleaded guilty to breaching s993B(1) of the Act by failing to ensure that some client money it received was held in segregated client money trust accounts on a total of 707 days between 25 January 2016 and 31 December 2018.

Additionally, PSAPL admitted guilt to a second breach of s993B(1) of the Act, which occurred when PSAPL failed to transfer $1,044.65 into a trust account on 21 August 2017. PSAPL was not sentenced for this breach, but it was taken into account during sentencing.

PSAPL is the first company in Australia to be convicted of criminal offences for breaching client money provisions, which are designed to protect the interests of AFS licensee clients by ensuring that client money is kept separate from licensee money.

As FinanceFeeds readers may recall, back in December 2019, ASIC accused Pershing Securities Australia of breaching client money obligations, and the company accepted additional license conditions imposed by the regulator.

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