This press release highlights ASIC’s continuing war on Pre-Insolvency business advisers who offer advice to companies in financial distress. The bottom line is that business advisers must give lawful advice or they will be held personally responsible for the illegal actions of their clients.

Business adviser guilty of aiding a director’s breach of duty

An ASIC press release says a Pre-Insolvency adviser who provided business advice to directors of struggling companies was convicted and issued a fine. Investigations conducted by ASIC found the adviser provided assistance that resulted in a director dishonestly using his position to conceal company assets from an appointed Liquidator.

A business adviser has been found guilty of dishonestly aiding or counselling a director to breach their director duties under the Corporations Act.

The press release says that in following the pre-insolvency adviser’s advice, the director had attempted to prevent the Liquidator from having access to the company assets and to retain the benefit of those assets for himself, rather than the creditors of the company.

Read the full ASIC media release here.

Advice from Unlicensed and Unregulated Advisers – ASIC says Don’t Risk it with Untrustworthy Advisers

ASIC Commissioner Greg Tanzer said ‘… business advisers, are trusted to give advice that is lawful and in the best interest of their clients…This outcome … sends a clear message to business advisers and other gatekeepers that they will be held personally responsible for knowingly providing advice to clients that causes their clients to act illegally’.

Apart from being convicted and fined, the adviser has also been disqualified from managing a corporation for a period of five years.