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ASIC bans WA broker - Nov 2019

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Reporter 4 minute read

The corporate regulator has banned a Western Australia-based broker and cancelled the ACL of his brokerage after finding he had provided false documents in support of four loan applications.

The Australian Securities and Investments Commission (ASIC) has banned Tim Zheng, director of Element Finance Group (EFG), from engaging in credit activities for three years.

The regulator has also cancelled the Australian Credit Licence (ACL) of the brokerage.

ASIC found that Mr Zheng had acted “recklessly” in providing false documents in support of four loan applications between September 2017 and February 2018.

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According to ASIC, Mr Zheng subsequently made a false statement to the regulator in the annual compliance certificate for EFG in July 2018 by failing to disclose that Bankwest had terminated his accreditation after it found that he lodged four home loan applications that were supported by false documents.

ASIC found that Mr Zheng also failed to disclose that EFG and his membership with the Australian Finance Group (AFG) were terminated.

As a result, ASIC determined that Mr Zheng was “not a fit and proper person to engage in credit activities”.

“It is essential that credit licensees act with honesty and diligence in discharging their obligations, ASIC commissioner Sean Hughes said.

Chris Slater, AFG's head of sales & distribution noted the ban, stating: AFG prides itself on upholding some of the most stringent compliance processes in the industry and has a zero-tolerance policy to any infringements.

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Potential breaches of our strict code of conduct and legal, credit and compliance obligations by Tim Zheng were identified and AFG suspended Mr Zheng’s contract while a detailed internal investigation was conducted. When the investigation confirmed discrepancies, AFG terminated Mr Zheng’s contract.

As part of its ongoing commitment to compliance, AFG proactively and voluntarily reports any serious breaches of broker conduct to ASIC. In line with this practice, AFG voluntarily reported Mr Zheng to ASIC," he said, adding that AFG fully co-operated with ASIC’s subsequent inquiries, providing the findings of AFG’s internal investigation and other supporting evidence”.

Mr Zheng’s banning is recorded on ASIC’s Banned and Disqualified Persons Register.

Mr Zheng and EFG have the right to appeal to the Administrative Appeals Tribunal for a review of the decision.

[Related: ASIC reveals broker share of customer complaints]

ASIC bans WA broker - Nov 2019
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