Criminal Cases

USA – Mar 2017 – “ZTE Corporation has agreed to enter a guilty plea and to pay a $430,488,798 penalty to the U.S. for conspiring to violate the International Emergency Economic Powers Act (IEEPA) by illegally shipping U.S.-origin items to Iran, obstructing justice and making a material false statement. ZTE simultaneously reached settlement agreements with the U.S. Department of Commerce’s Bureau of Industry and Security (BIS) and the U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC). In total ZTE has agreed to pay the U.S. Government $892,360,064. The BIS has suspended an additional $300,000,000, which ZTE will pay if it violates its settlement agreement with the BIS.”

Aus – Mar 2017 – building and planning offences – “carrying out development contrary to condition of development consent – erection of building without construction certificate and appointment of principal certifying authority – excavation of land caused damage to adjoining buildings – objective seriousness of offences – failures causally linked to damage to adjoining buildings” Burwood Council v Erector Group Pty Ltd; Burwood Council v Liverpool Developing Pty Ltd [2017] NSWLEC 20

US – Oct 2016 – Alleged violation of Weapons of Mass Destruction Proliferators Sanctions Regulations – “Four Chinese nationals and a trading company based in Dandong, China, were charged by criminal complaint unsealed today with conspiring to evade U.S. economic sanctions and violating the Weapons of Mass Destruction Proliferators Sanctions Regulations (WMDPSR) through front companies by facilitating prohibited U.S. dollar transactions through the United States on behalf of a sanctioned entity in the Democratic People’s Republic of Korea (North Korea) and to launder the proceeds of that criminal conduct through U.S. financial institutions.”

Aus – Aug 2016 – Development Act 1993 offences committed by four companies and one director – PG – rather extraordinary sentencing reasons, ascribing more blame to the director than the licenced corporations – fines to two offenders only.

US – Aug 2016 – Pacific Gas & Electric found guilty after jury trial of obstructing an investigation and pipeline safety violations – indictment here.

Infringement Notices

Aus – June 2017 – “UBS Securities Australia Limited (‘UBS’) has paid penalties totalling $280,000 to comply with two infringement notices given to it by the Markets Disciplinary Panel (‘the MDP’). The first infringement notice ($140,000) relates to the operation, use and monitoring of a crossing system known as UBS Price Improvement Network (‘UBS PIN’). The second infringement notice ($140,000) relates to incorrect disclosures in crossing confirmations about execution venue and trading as principal, and the provision of incorrect regulatory data to market operators.”

Aus – Jan 2017 – “Pershing Securities Australia Pty Ltd (“Pershing”) has paid a penalty of $40,000 to comply with an infringement notice given to it by the Markets Disciplinary Panel (“MDP”).The MDP had reasonable grounds to believe that Pershing had contravened subsection 798H(1) of the Corporations Act by failing to comply with Rule 5.6.1(1) of the ASIC Market Integrity Rules (ASX Market) 2010. This Rule requires trading participants to have appropriate automated filters for their automated order processing (AOP) systems.

USA – Dec 2016 – “The Financial Industry Regulatory Authority (FINRA) announced today that it has fined Credit Suisse Securities (USA) LLC $16.5 million for anti-money laundering (AML), supervision and other violations.  FINRA found that Credit Suisse’s suspicious activity monitoring program was deficient in two respects. First, Credit Suisse primarily relied on its registered representatives to identify and escalate potentially suspicious trading, including in microcap stock transactions. In practice, however, high-risk activity was not always escalated and investigated, as required. Second, the firm’s automated surveillance system to monitor for potentially suspicious money movements was not properly implemented. A significant portion of the data feeds into the system were missing information or had other issues that compromised the system’s effectiveness. The firm also chose not to utilize certain available scenarios designed to identify common suspicious patterns and activities, and it failed to adequately investigate activity identified by the scenarios that the firm did utilize.”  Credit Suisse’s letter of Acceptance, Waiver and Consent is available here.

Aus – Nov 2016 – This matter resolved via infringement notices and enforceable undertaking – “Following an ASIC investigation, payday lender Cash Converters will refund $10.8 million to consumers who received small amount loans under approximately 118,000 small amount credit contracts. Cash Converters has paid a $1.35 million penalty following the issuing of infringement notices by ASIC.  ASIC has agreed to accept an enforceable undertaking from Cash Converters following concerns that, in respect of small amount loans processed via its online website at, Cash Converters failed to make reasonable inquiries into consumers’ income and expenses, particularly in situations where the small amount loan was presumed by the credit legislation to be unsuitable.”

Dubai – Sep 2016 – “The Dubai Financial Services Authority (DFSA) has imposed a fine of USD 85,191 (AED 312,650.97) on Clements (Dubai) Limited (CDL). The fine was imposed following a DFSA investigation conducted in collaboration with the Insurance Authority of the United Arab Emirates (UAE).  The investigation found that, from January 2014 to July 2014, CDL engaged in prohibited insurance activities in breach of DFSA administered Rules.  The fine includes the giving up of commissions earned by CDL from the prohibited activities.”

Aus – Sep 2016 – ASIC’s Markets Disciplinary Panel issued two infringement notices (1, 2) to Commonwealth Securities Limited (“CommSec”) because it “had reasonable grounds to believe that CommSec contravened subsection 798H(1) of the Corporations Act”.

Aus – Sep 2016 – ASIC’s Markets Disciplinary Panel issued an infringement notice to Morgan Stanley Australia Securities Ltd, because it “had reasonable grounds to believe that Morgan Stanley contravened subsection 798H(1) of the Corporations Act”.

Aus – Sep 2016 – ASIC issued four (1, 2, 3, 4) infringement notices totalling $180,000 to CBA for breaches of its responsible lending obligations on approximately 10,600 occasions between 2011 and 2016.  You’ll note I haven’t used the word “alleged” – that’s because CBA self-reported these breaches to the regulator.  The $2.5M in loan balances to be written off amounts to little over $230 per customer who was wrongly issued a loan (or increased withdrawal limit).

Civil Cases

USA – June 2017 – consumer privacy violations – “As the result of long-running litigation to redress invasion of consumer privacy, most notably through violation of the National Do Not Call Registry brought by the U.S. Department of Justice as well as the States of California, Illinois, North Carolina, and Ohio, a federal court in Illinois has ordered penalties totaling $280 million and strong injunctive relief against Englewood, Colorado-based satellite television provider Dish Network.”

USA – June 2017 – ponzi scheme – “On June 7, 2017, a three-judge panel of the United States Court of Appeals for the Ninth Circuit issued two opinions that affirmed the entry of summary judgment in favor of the Securities and Exchange Commission on its claims against MRI International; MRI CEO, Edwin Fujinaga and his wife, June Fujinaga; and Mrs. Fujinaga’s trust, The Yunju Trust. The panel also upheld an order of judgment requiring Edwin Fujinaga and MRI to pay more than $580 million in disgorgement, prejudgment interest, and civil money penalties, as well as an order holding June Fujinaga and her trust liable to pay disgorgement of more than $2.3 million in ill-gotten gains.”

USA – Jan 2017 – failure to keep proper records – “The Securities and Exchange Commission today announced that L3 Technologies Inc. (formerly known as L-3 Communications Holdings Inc.), a contractor for U.S. and various foreign government agencies, has agreed to pay a $1.6 million penalty to settle charges that it failed to maintain accurate books and records and had inadequate internal accounting controls. 

USA – Dec 2016 – “The Justice Department filed a consent order today to resolve allegations that Union Savings Bank and Guardian Savings Bank engaged in a pattern or practice of “redlining” predominantly African-American neighborhoods in and around Cincinnati; Columbus, Ohio; Dayton, Ohio; and Indianapolis.  “Redlining” is the discriminatory practice by banks or other financial institutions of denying or avoiding providing credit services to consumers because of the racial demographics of the neighborhood in which the consumer lives.

Aus – Dec 2016 – Failure to disclose information contrary to s674 Corporations Act 2001 (Cth) – $800,000 pecuniary penalty (max. penalty $1M) – ASIC, in the matter of Sino Australia Oil and Gas Limited (in liq) v Sino Australia Oil and Gas Limited (in liq) [2016] FCA 1488.  ASIC’s press release here.

US – Oct 2016 – Discrimination – “The Justice Department announced today that the owners and managers of four multi-family apartment complexes in the Salt Lake City area have agreed to pay $45,000 to settle a lawsuit alleging that they violated the Fair Housing Act by discriminating against tenants and prospective tenants with disabilities.”

US – Sep 2016 – “The Justice Department filed a proposed consent decree today with 30 Hop restaurant … resolving claims that the establishment violated the new construction requirements of Title III of the Americans with Disabilities Act (ADA).  …  The department’s complaint alleges that 30 Hop does not provide an accessible route to the rooftop patio or lower level, has an inaccessible entrance, has no accessible dining tables and has inaccessible bathrooms.”

Aus – Sep 2016 – Director, Fair Work Building Inspectorate v J Hutchinson Pty Ltd & Ors [2016] FCCA 2175– Industrial law – Discrimination because company did not have an EBA with CFMEU – Pecuniary penalties of $25,575.00 payable by corporate defendant, to the Commonwealth.

Aus – Aug 2016 – Corporations Act 2001 contraventions – breach of duties as responsible entity – ASIC v Macquarie Investment Management Ltd – Macquarie declared to have breached duties – ordered to pay $400,000 pecuniary penalty and $200,000 in legal costs (both agreed). ASIC summary here.

USA – Aug 2016 – Discrimination – The DOJ alleges that “several mortgage loan modification service providers violated the federal Fair Housing Act and Equal Credit Opportunity Act by intentionally discriminating against Hispanic homeowners by targeting them for predatory mortgage loan modification services and interfering with their ability to receive financial assistance to maintain their homes.  The defendants named in the lawsuit are The Home Loan Auditors LLC, Century Law Center LLC, SOE Assistance Center Inc., Spieker Law Office [and individuals].”

Aus – Aug 2016 – Corporations Act violations by company and its director – Federal Court declared that SinoAustralia Oil and Gas Limited (in liq.) had contravened sections 674(2), 728(1)(a), 728(1)(b), 728(1)(c),1041H of the Corporations Act (false prospectus representations, failures to disclose, misleading prospectus representations, provision of false information to auditors) – penalty to be fixed.

Administrative Actions

Licence Cancellation

Aus – Nov 2016 – “ASIC has cancelled the Australian credit licence of S & S Enterprises Pty Ltd, trading as appliance rental business Rent To Own Appliances, after ASIC found it had entered into credit contracts where it charged consumers an annual interest rate higher than the 48 per cent maximum allowable under the National Credit Act.”

Aus – Oct 2016 – “ASIC has cancelled the Australian financial services (AFS) licence of Lotus Securities Ltd (AFS licence 306812) for failing to comply with a number of its key obligations as a financial services licensee”.

Aus – Sep 2016 – “ASIC has cancelled the Australian Financial Services (AFS) licence of Brisbane-based education and training business, The Sharemarket College Pty Ltd (AFS licence No 331635). ASIC has also banned the Responsible Managers of The Sharemarket College, Mr Graeme Allan Rogers and Mrs Jill Rogers.”

Aus – Aug 2016 – “ASIC has cancelled the Australian financial services licence held by Marigold Falconer International Limited (Marigold Falconer).  Marigold Falconer was unable to satisfy ASIC that it could obtain insurance cover for the services it was authorised to provide under the licence, which included providing financial product advice and dealing in financial products.”

Aus – Aug 2016 – “ASIC has cancelled the Australian financial services (AFS) licence of Pacific Millennium International Investment Group Pty Ltd (PMIIG) after it was found to have breached the obligations of a financial services licensee.”

Licence Suspension

Aus – Nov 2016 – “ASIC suspended the Australian financial services (AFS) licence of Parramatta-based Rural & General Insurance Broking Pty Limited (RGIB) for failing to lodge financial statements, auditor’s reports and auditor’s opinions for the financial years ending 30 June 2014 and 30 June 2015.”

Public Warning Notices

Aus – Aug 2016 – Company/business “Titantrade” engaging in unlicensed financial services – ASIC public warning. Enabling legislation: s12GLC ASIC Act 2001.

Enforceable Undertaking

Aus – Mar 2017 – “ASIC accepted an enforceable undertaking (EU) from three Barclays foreign financial service providers (FFSPs):

  • Barclays Capital Inc. (BCI) domiciled in the United States of America
  • Barclays Capital Asia Limited (BCAL) domiciled in Hong Kong, and
  • Barclays Capital Securities Limited (BCSL) domiciled in the United Kingdom,

collectively ‘the Barclays entities.’  As part of the terms of the EU, the Barclays entities will contribute $500,000 to The Ethics Centre for research and development into the provision of financial services to Australian clients.  The EU was accepted by ASIC following concerns about significant breaches of the conditions of the ASIC class order licensing exemptions relied on by the Barclays entities, including the failure to notify ASIC of breaches within the required time.”

Dubai – Oct 2016 – Money laundering – “The Dubai Financial Services Authority (DFSA) has accepted an Enforceable Undertaking (EU) from Rasmala Investment Bank Limited (RIBL), a company incorporated in the Dubai International Financial Centre and a DFSA Authorised Firm.  The EU resulted from DFSA concerns about RIBL’s anti-money laundering (AML) systems and controls, and about whether it had carried out the Financial Service of Providing Custody to its clients without being licensed to do so.”

Aus – Sep 2016 – ASIC “has accepted an enforceable undertaking (EU) from Neo Financial Solutions Pty Ltd (Neo) following concerns about the adequacy and application of Neo’s risk management and compliance frameworks.”

Aus – Sep 2016 – ACCC “has accepted a court enforceable undertaking from a Melbourne-based fruit and vegetable wholesaler, Young Sang & Co. (Aust.) Pty Ltd (Young Sang), for breaches of the Horticulture Code of Conduct.”

Aus – Aug 2016 – ASIC has accepted an EU from My Adviser Pty Ltd, prompted by ASIC’s concerns it may not have been complying with is obligations under the Corporations Act 2001.  View the EU here.

No Enforcement Action – Consumer Education; “Expressing Disappointment”

Aus – Sep 2016 – “ING Bank (Australia) Limited, the promoter and investment manager of the ING Direct Superannuation Fund (Living Super), will compensate around 24,500 members approximately $5.38 million following ASIC concerns that statements made in its promotional material about the fees paid in connection with its Living Super product were potentially misleading…ASIC also expressed disappointment that ING Bank was promoting Living Super using product inducements to clients separate from the superannuation product such as cash payments. ASIC observes that promotions of this type are a bad practice that may encourage decisions to be made on the basis of short term considerations that may not reflect the needs of a member. ING Bank has advised ASIC that it will stop offering separate product inducements in relation to Living Super.”

Aus – Sep 2016 – “Westpac Banking Corporation (Westpac) has recently refunded approximately $20 million to around 820,000 customers for not clearly disclosing the types of credit card transactions that attract foreign transaction fees.” No enforcement action was taken, but ASIC distributed a media release with consumer information.