The Federal Court has ordered Colonial First State Investments Limited (FirstState) to pay a civil penalty of $20 million for misleading members in relation to MySuper. FirstState’s conduct was the subject of a case study by the Banking Royal Commission.
The Court previously declared CFSIL, as trustee for the Colonial First State FirstChoice Superannuation Trust, had breached the ASIC Act and Corporations Act 2001 when communicating to members on at least 12,978 occasions (see ASIC 21-237MR and related TT article). The misleading and deceptive conduct by CFSIL involved telling its members that legislative changes required FirstState to contact them and obtain an investment direction to stay in the FirstChoice Fund when that was not the case.
The Court said it was appropriate to impose a substantial penalty of $20 million as the contraventions were serious. The Court said the contraventions “involved false or misleading representations made to approximately 13,000 members of the fund, in a concerted campaign which went on for more than two years”. The Court noted that FirstState’s conduct effectively sought to take advantage of members whose interests it was duty-bound to protect. However, the Court acknowledged FirstState’s ongoing remediation program, and said that without the remediation program the penalty would have been higher.
(ASIC v Colonial First State Investments Limited [2021] FCA 1268, Federal Court, Murphy J, 19 October 2021.) [LTN 201, 198, 19/10/21]
[Tax Month – October 2021 – Previous Tax Month] 19.10.21