Simeone To Pay $170,000 For Investing Without Authority
Simeone Pty Ltd has been held accountable for investing funds without authorization, leading to a compensation order of $170,000.
Complaint
The complainants in this matter are Ms T, in her personal capacity, and the corporate trustee of a Self-Managed Superannuation Fund (SMSF) of which Ms T is the director.
Simeone Pty Ltd is a multidisciplinary practice encompassing accounting and taxation, lending, debt management, personal and general risk insurance, investments, superannuation and estate planning. Its principal is Mr S, who was also the relevant adviser to Ms T and the trustee.
The complainants say Mr S advised Ms T to roll over her superannuation funds into a newly established SMSF. However, they say $190,000 of the SMSF’s funds were invested into a Unit Trust controlled by Mr S, without authority.
Simeone says AFCA lacks jurisdiction, as it did not provide financial advice to Ms T, rather it only provided administrative and accounting services. Simeone accepts Ms T established the SMSF with its assistance, but says the trustee authorised the Unit Trust investment. It also claims the trustee has outstanding loans in the Unit Trust.
The case manager has already provided a recommendation on these issues. The recommendation was in favour of the complainant.
Issues and Key Findings
Were The Findings In The Recommendation Correct?
Except where set out otherwise below, AFCA is satisfied that the previous case manager’s recommendation contains an accurate summary of the complaint, the issues to be determined, any applicable paragraphs of the rules and any relevant law. The findings in the recommendation are correct and are adopted in this determination.
Why Is The Outcome Fair?
Simeone provided inappropriate financial advice to establish an SMSF, rollover superannuation and invest. They have also not established that they had written authority to invest on behalf of the trustee.
Accordingly, it should compensate the complainants for the direct losses caused by its wrongful conduct. However, the compensation awarded also recognises that Ms T has derived certain benefits from the SMSF and Unit Trust investment which should properly result in an adjustment to the outcome.
Determination
This determination is in favour of the complainants.
Simeone Pty Ltd must pay:
- $165,563.00 to Ms T’s nominated superannuation fund, plus interest; and
- $5,400.00 to Ms T in contribution to legal fees incurred.
Ms T should repay:
- $28,250 to her SMSF in order to meet its compliance obligations and take steps to wind up the SMSF.
Legal Help After Poor Financial Advice
If you have received inappropriate or inadequate financial advice and need legal support, please get in touch with our team of skilled legal experts. Our primary aim is to provide our clients with excellent guidance and aid, particularly when it comes to financial issues. You can reach out to us through our website, call us at 1300 433 533, or send us an email at enquiry@fdlegal.com.au.
