Former AMP Authorised Representative Pleads Guilty to Criminal Charges of Dishonest Conduct

On 24 March 2023, Fong Financial Planners Pty Ltd (Fong FP), a former authorised representative of AMP, pleaded guilty in the Perth Magistrates’ Court to three charges of dishonest conduct while carrying on a financial services business in contravention of section 1041G Corporations Act 2001 (Cth). The charges were brought by ASIC.

The charges relate to insurance applications Fong FP submitted on behalf of clients to AMP in2014.  Fong FP deliberately failed to disclose all relevant information relating the relevant clients’ personal circumstances and medical history.  If disclosed, this may have resulted in further assessments and information being sought, and possible exclusions.  This incomplete disclosure meant the relevant clients failed to meet the duty of disclosure required of the insured, and placed their insurance cover at risk.

The case is interesting for a number of reasons:

• Section 1041G is a criminal offence.  It is also rarely prosecuted with an average of only 1-2 prosecutions each year.
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• Fong FP and its director and former advisor, David Fong, were each initially charged with 11 charges of breaching Section 1041G.  ASIC’s media release states:‍‍

"The charges against Mr Fong and eight of the charges against Fong Financial Planners were discontinued following Fong Financial Planners’ pleas of guilty to the three charges above."

Reading between the lines it appears that the guilty plea from Fong FP to the three charges was part of a settlement with ASIC and the CDPP involving the other charges against Fong FP and David Fong being dropped.

This is not unusual in criminal matters, and especially in white collar crime where establishing the elements of a criminal offence can be especially difficult.

Through a settlement negotiation, a plea of guilty for a corporate defendant, in exchange for the prosecution dropping charges against a director or individual can be an option.  Also, it can be possible to reduce the overall number of charges to which a defendant pleads guilty by ‘rolling them up’ – this means combining a number of distinct events but with a similar character under one charge, thereby effectively reducing the potential overall penalty.

The matter will be sentenced in a future date, and it will be interesting to see the penalty to be imposed by the Court on these offences, and get more insight into the formulation of the charges.

Those facing potential criminal prosecution for white collar crime should be aware that the initial charges are not necessarily those that will run at trial, and that there are options available through negotiation in some circumstances to mitigate the risk or potential outcome.

ASIC’s media release is available here.

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The contents of this article do not constitute legal advice and it is not intended to be a substitute for legal advice and should not be relied upon as such.  It is designed and intended as general information in summary form, current at the time of publication, for general informational purposes only.  You should seek legal advice or other professional advice in relation to any particular legal matters you or your organisation may have.