The Australian Securities & Investment Commission (ASIC) has banned a former director of collapsed lender Provident Capital from providing financial advice for two years.
John Patrick Sweeney served as a non-executive director of Provident Capital, which was placed into liquidation in 2012, from July 2008 to May 2014 and ASIC has found during this time he failed to comply with financial services laws.
While investigating the collapse of Provident Capital, ASIC found Mr Sweeney had engaged in misleading or deceptive conduct in relation to a financial product, specifically in relation to his conduct from September 2010 to March 2012 when he approved Provident Capital's Quarterly Reports and Benchmark Reports issued to ASIC and Australian Executor Trustees Limited.
“ASIC and the community expect directors of companies to behave in a manner appropriate to their position,” ASIC commissioner John Price said.
“ASIC's action against Mr Sweeney demonstrates ASIC will take action against people who fail to meet their obligations.”
ASIC suspended Provident Capital’s Australian Financial Services Licence on 15 October 2012.
Provident Capital issued debentures to retail investors through their Fixed Term Investment Portfolio and advanced the debenture funds to third party borrowers, including property developers, on a first mortgage basis.
Provident Capital also operated a mortgage fund under a wholesale facility with Bendigo
Bank and two managed investment schemes.
When Provident Capital went into liquidation on 24 October 2012 over 3,000 Provident debenture holders were owed approximately $130 million.
Receivers have estimated that the likely return to debenture holders will be in the range of $0.17 to $0.19 in the dollar.
In February, ASIC banned managing director of Provident Capital Limited, Michael Roger O’Sullivan Sydney from managing corporations for five years and from providing financial services for seven years.
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