The Federal Court has ordered that Dover Financial Advisers Pty Ltd (Dover) pay a $1.2 million penalty for engaging in false or misleading conduct, and that Terrence (Terry) McMaster, Dover鈥檚 sole director, pay a $240,000 penalty for being knowingly concerned in Dover鈥檚 conduct.
These penalties follow the Federal Court鈥檚 22 November 2019 judgment, which found that Dover engaged in false, misleading or deceptive conduct when it provided a Client Protection Policy to 19,402 clients between around 25 September 2015 and 30 March 2018, and that Mr McMaster was knowingly concerned in Dover鈥檚 contraventions (19-321MR).
In that judgment, His Honour Justice Michael O鈥橞ryan found that the title of the Client Protection Policy 鈥榳as highly misleading and an exercise in Orwellian doublespeak. The document did not protect clients. To the contrary, it purported to strip clients of rights and consumer protections they enjoyed under the law鈥�.
Today, in handing down his penalty decision, Justice O鈥橞ryan said, 鈥榤any clauses of [Dover鈥檚] Client Protection Policy sought, perversely, to make the client responsible for failings and inadequacies in the advice provided to them鈥�, and that 鈥榯he contravention arose out of the conduct of the most senior management within Dover, being Mr McMaster鈥�.
While not satisfied that Mr McMaster was consciously aware that the Client Protection Policy contained a false or misleading statement, Justice O鈥橞ryan observed that he had been aware of all the relevant facts making it so, and that 鈥楳r McMaster鈥檚 behaviour following the institution of these proceedings indicates that he has only a limited appreciation of the seriousness of the contravening conduct and little if any contrition for the wrongdoing.鈥�
ob体育 Commissioner Danielle Press said, 鈥楾he purpose of Dover鈥檚 Client Protection Policy was to exclude or limit Dover鈥檚 liability to clients to its own financial benefit. The significant penalties handed down today demonstrate the seriousness of this misconduct and will act as a deterrent to others who believe they can get away with similar behaviour.鈥�
In arriving at the penalty, the Court considered the 19,402 contraventions of the law 鈥� one contravention for each time the Protection Policy was provided to a client.
Dover and Mr McMaster have also been ordered to pay ob体育's costs.
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Background
This proceeding was commenced by ob体育 on 13 September 2018 (18-269MR) and follows the cancellation of Dover鈥檚 Australian Financial Services licence and the entry into an Enforceable Undertaking pursuant to which Mr McMaster agreed to exit from the financial services industry on a permanent basis (18-195MR).
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