How do i prepare written submissions on behalf of a client (who is the respondent ASIC) for a hearing before the Administrative Appeals Tribunal (AAT)?

Instructions 1. You are counsel for the Respondent, the Australian Securities and Investments Commission (ASIC). 2. Your role as a lawyer acting for ASIC is to assist the AAT in coming to the correct or preferable decision. You are tasked with presenting written submissions to the Tribunal. 1

From the background, procedural history and the T-documents, you are instructed to prepare and present arguments to the Tribunal as to why it should find in favouor of the Respondent. In doing so, your submissions must be supported by relevant provisions of Corporations Act 2001 (Cth), the Administrative Appeals Tribunal Act 1975 (Cth), any case law supporting your contentions and with reference to the T-documents.

Procedural history

5. On 2 June 2020, ASIC made a decision to ban Desmond (Des) Moines from holding a financial services license for ten years under sections 920A and 920B of the Corporations Act 2001 (Cth). This followed a decision on 13 April 2018 to suspend Des financial services license. 6. Des lodged an application for merits review with the Taxation and Commercial Division of the Administrative Appeals Tribunal (AAT) on 9 June 2020. He is the Applicant in these proceedings. 7. The legislation relevant to this application is the Corporations Act 2001 (Cth). The question before the Tribunal, therefore, is whether the making of the banning order in respect of the Applicant is the correct or preferable decision and, if so, what should be the length of the order. 8. You have had a chance to review the Applicants written submissions. The Applicant contends that the decision to ban him from providing any financial services is incorrect. He contends that he should not be banned at all, or that if he is to be banned, it should be for a shorter period of time. A summary of the Applicants written submissions are as follows: a) his conduct concerning the provision of information regarding Go-Buy-Us Industries Pty Ltd (Go-Buy-Us) has not contravened financial securities laws in respect of obligations to act in the best interest of the client in the provision of financial product advice pursuant to Chapter 7, Part 7.7A, Division 2 of the Corporations Act 2001 (Cth). On this basis, the provision of information regarding Go-Buy-Us was not a sufficient basis to trigger ASICs decision to ban the Applicant; 2

b) his conduct has not contravened financial securities laws prohibiting misleading or deceptive conduct because the information regarding Go-Buy-Us was substantively factually correct, it was not his intention to mislead or deceive the recipients of the information, and/or the information contained in the email correspondence was not of the character that is likely to mislead or deceive a reasonable investor; c) his conduct involving his brother, Leslie Moines, and BaySuper has not contravened financial securities laws prohibiting dishonest conduct in relation to a financial product; d) he is not of bad fame or character. He accepts that he should not have misrepresented himself to Leslie Moines superannuation company, but argues that Leslie had told him he could do whatever about the accounts, and that he was frustrated at the time by the stress placed on him as a result of the impending trial and his brothers continuous requests for money. In his view, this was not something he did as a financial advisor, but in trying to sort out family affairs in case he was sent to jail for fraud; and e) he admits that he failed to disclose that his family had an interest in Go-Buy-Us when he passed on the information concerning the company. However, for the purpose of the questions before the Tribunal, he submits that it is relevant that such actions had nothing to do with his business, there is no evidence of him standing to benefit from such conduct, and as such this conduct should be given either no or low weight in determining whether to ban him or, the length of the his ban.

Background 9. Mr Des Moines was born on 1 February 1956. He is 64 years old. He is the director and principal of the financial services firm, Moines Financial Services Pty Ltd. At all relevant times before 13 April 2018, Des Moines was granted a financial services licence by ASIC in accordance with Part 7.6 of the Corporations Act 2001 (Cth). Fraud Charges 10. On 12 April 2018, Des was arrested by Western Australia Police, following a joint investigation by Western Australia Police, the Australian Federal Police and ASIC. Des was charged with fraud. It was alleged that he had fraudulently advised clients to invest in Go-Buy-Us. 3

11. Go-Buy-Us was registered with ASIC in the names of Terry Moines and Kim Reynolds, Des son and son-in-law. It was alleged that despite the company being registered in Terry and Kims names, Des was the controlling mind of Go-Buy-Us and had established a scheme in which he profited from the business. Des was alleged to have fraudulently provided false information to clients inducing them to invest in Go-Buy-Us, then directly profited from the investment. When Go-Buy-Us collapsed, it was revealed that large amounts of money had been paid into another account by Terry, to which Terry and Des were signatories. Terry plead guilty to fraud related charges, but maintained that Des was innocent. 12. Des was charged with fraud and released on bail awaiting trial. He was committed to stand trial in the Supreme Court of Western Australia in October 2018; however the trial incurred difficulties. On the first occasion, a mistrial was declared after evidence was put before the jury that was deemed inadmissible. In both the second and third trials, the juries were unable to reach a verdict and were discharged after several days of deliberation in each case. Des did not give evidence in any of the trials. 13. On 30 March 2020, after the third trial had closed, the Director of Public Prosecutions announced that the prosecution would be discontinued and lodged a notice with the Supreme Court of Western Australia confirming this the next day. In a statement to the media, the Director of Public Prosecutions stated that although he was still satisfied that there was a case for Des to answer if another trial took place, the length of time and cost so far meant it was no longer in the interests of justice to prosecute Des. Des brother Leslie 14. During the prosecution of the offences, ASIC suspended Des financial services licence with his consent. Des continued, however, to assist his identical twin brother, Leslie. Leslie is a retired veteran, who is entirely dependent on his veterans pension and distributions from his superannuation account. 15. Leslie often found himself short of money, and would request that Des give him small amounts from time to time. Des began to suspect that Leslie was being underpaid by his superannuation company, but Leslie continually told Des that he didnt want to make a fuss about the payments. Leslie was not on the record as a client of Moines Financial Services Pty Ltd. 16. In November 2018, Des called Leslies superannuation provider and asked for details. When he called the company, he told the receptionist he was Leslie and asked for a copy of his (Leslies) file. He was required to attend in person and did so. The receptionist identified him as Leslie and did not ask for identification. Des collected and analysed the 4

documents held by the superannuation company. He determined that Leslie was owed significantly more than the accounts reported due to an administrative error. 17. Unfortunately, when Leslie went in to sign documents to claim the extra funds several days later, he told staff how grateful he was that Des had done all of the hard work and collected the documents for him. The receptionist at Leslies superannuation company immediately realised what had occurred and notified her supervisor. They then notified Western Australia Police concerned that identity fraud that may have taken place. Leslie refused to press charges against Des and Western Australia Police did not take the matter any further. Decision under review 18. After the prosecution was discontinued, ASIC formed the view that there was still concern about Des business activities and made a decision under sections 920A and 920B of the Corporations Act 2001 (Cth) to ban Des from providing any financial services for a period of ten years. 19. ASIC did so relying on section 920A(1)(e) of the Corporations Act 2001 (Cth), arguing that Des conduct in relation to his Go-Buy-Us clients and in dealing with Leslies affairs amounted to failure to comply with a financial services law. In particular, ASIC formed the view that Des had engaged in misleading or deceptive conduct in respect of referring clients to Go-Buy-Us and in conducting business as Leslies financial advisor. ASIC also relied on section 920A(1)(d) of the Corporations Act 2001 (Cth), arguing that although Des had not been successfully prosecuted for fraud, his conduct as revealed by the evidence indicates he is not of good fame or character.