Leading law firm Slater and Gordon has urged consumers who received financial advice from a company facing landmark legal action to investigate their legal rights to compensation.
The Australian Securities and Investments Commission (ASIC) has launched court proceedings against NSG Financial Services Pty Ltd, formerly National Sterling Group Pty Ltd, under the new ‘Future of Financial Advice’ reform.
The proceedings are the first by ASIC against a licensee for alleged breaches of the best interests duty.
Slater and Gordon Senior Associate James Naughton said it was a significant case that would determine how courts deal with the new provisions.
“This is an important development for consumers who may have claims against their financial advisor for the provision of poor financial advice,” Mr Naughton said.
ASIC alleges NSG failed to take reasonable steps to ensure its advisors complied with their obligations, did not deliver appropriate training to its advisors, pushed unnecessary products and did not provide compliance and risk management policies.
Media reports suggest that NSG used teachings of the Church of Scientology founder L. Ron Hubbard as part of its training. These claims have not been confirmed by NSG.
“Slater and Gordon is currently investigating whether the conduct of NSG will lead to compensation claims to those who received their financial advice,” Mr Naughton said.
“Consumers who have received advice from NSG or its representatives Mustafa Ozak and Van Trinh are encouraged to consider their legal rights and options.”
Mr Naughton said the claim brought by ASIC is an important reminder of obligations within the financial industry.
“The proceedings brought by ASIC seek civil penalties against the licensee, however affected consumers may also be entitled to compensation,” he said.
The first hearing of the matter will take place on 8 July, 2016, in the Federal Court of Australia in Melbourne.