An analysis of challenges to ASIC’s s 920A banning orders against financial services providers in the AAT and the courts

Abstract

Section 920A of the Corporations Act 2001 (Cth) provides ASIC with a flexible power to ban individuals from the Australian financial services industry on a number of grounds. The objective of this power is to protect consumers through upholding compliance with the law and adherence to professional standards. Banned individuals may apply to the Administrative Appeals Tribunal (AAT) to review the merits of such decisions, and on limited points of law such cases may be further appealed to the Federal Court of Australia (FCA). This article analyses the practice of the AAT and the FCA in determining challenges to s 920A banning orders. The 50 AAT cases examined in the article provide interesting examples of misconduct by financial advisers, stockbrokers and traders, insurance brokers and operators of investment schemes. The article shows that whilst the AAT has shown a flexible approach in considering the circumstances of each banning (setting aside four bans and varying the length of 15 bans), it has nevertheless exhibited a firm approach in the other 31 cases in affirming bans following serious misconduct. The article concludes by suggesting some minor reforms to further enhance the range of protective enforcement tools available to ASIC.