ASIC sues Dover Financial, director for misleading clients
Financial Services September 17, 2018 3:53 pm By Cat Fredenburgh | Melbourne

ASIC has filed a lawsuit against shuttered financial adviser Dover Financial and its former director, who famously collapsed during questioning before the Royal Commission, over […]

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ASIC seeks declarations and penalties against Dover and McMaster, who it says was “knowingly concerned” in Dover’s violations of the ASIC Act.

In June, McMaster agreed to never work in the financial services industry again as part of a court-enforceable undertaking entered with ASIC that also stripped Dover of its operating licence.

McMaster, the sole director of the firm who collapsed on the witness stand at the Banking Royal Commission, agreed to “remove himself permanently” from the financial services sector.

Dover ceased operating on July 6.

ASIC said the company’s client protection policy conflicted with the obligations of an Australian Financial Services Licence holder in relation to client complaints and claims. It also said it was concerned Dover lacked the “organisational competency” required of an AFS licence holder.

Because of his role in preparing the policy, McMaster was “not of good fame and character” and was likely to break the law in the future, it said.

“In ASIC’s view [the policy] was designed to burden clients with the liability for losses resulting from advice that was negligent, inappropriate or not in a client’s best interests. This is inconsistent with or voided by the financial services law in the Corporations Act,” the commission said.

On May 18, ASIC notified Dover that it would be conducting an administrative hearing to assess the company’s ability to continue operating. Dover preemptively agreed to cease operating.

McMaster collapsed under questioning during the Royal Commission hearings in April and was wheeled out of the Federal Court in Melbourne on a stretcher.

A case management hearing has been scheduled for October 12 before Justice John Middleton.

The case is Australian Securities and Investments Commission v Dover Financial Advisers Pty Ltd & Anor.