ASIC decision to refuse Allegra an AFS licence gets affirmed
The Administrative Appeals Tribunal (AAT) has affirmed the decision of the Australian Securities and Investments Commission (ASIC) to refuse Allegra Financial Services Pty Ltd an Australian financial services licence (AFSL) to provide personal financial product advice to retail and wholesale clients.
On November 30, 2020, the AAT found that Allegra’s controller, sole director and proposed responsible manager, Lachlan Schonfelder, engaged in conduct such that it could not be satisfied that Allegra would provide financial services efficiently, honestly and fairly. The lack of candour in Mr Schonfelder’s dealings with ASIC also raised serious doubts in the AAT’s mind as to whether Allegra would be able to deal honestly.
Mr Schonfelder accepted a personal loan from a client while he was an authorised representative of another licensee and his employment was terminated. Allegra failed to disclose this in its application and Mr Schonfelder provided misleading information to ASIC regarding the reasons that he ceased employment with the licensee.
In making its decision, the AAT’s decision turned on Mr Schonfelder’s past conduct, and on his potential future conduct, given the central role he plays in the business and operations of Allegra.
ASIC Commissioner Danielle Press said the decision is a clear reminder to applicants that they must deal openly and honestly and provide full and frank disclosure to ASIC when applying for a licence and responding to requests for additional information.
Allegra applied to ASIC for an AFS licence in April 2018. On July 15, 2019, a delegate of ASIC refused Allegra’s licence application under s913B of the Corporations Act 2001. The delegate was particularly concerned about the certain past conduct of Mr Schonfelder.
Allegra appealed ASIC’s decision to the AAT on August 13, 2019.