AAT downgrades former adviser’s permanent ban

According to the Australian Securities and Investments Commission (ASIC), the Administrative Appeals Tribunal (AAT) has downgraded the regulator’s decision to permanently ban Todd Karamian from providing financial services and carrying on a financial services business, reducing it to seven years.

ASIC had permanently banned Karamian after finding he altered his Financial Adviser Certificate from a fail to a pass result and sent the altered certificate to his licensee, Bluepoint Consulting Pty Ltd, which was then subsequently provided to ASIC.

The regulator said it found that he provided personal advice to 11 retail clients when he was not authorised to do so as he had failed the Financial Adviser exam.

The AAT’s Justice Kyrou noted: “In order to uphold the integrity of the industry and those objectives, it is essential that the period of the banning order which is made in relation to the applicant is sufficiently lengthy to convey to others who are in the industry – or aspire to join it – that conduct of the type engaged in by him will result in a lengthy banning period, so as to deter them from engaging in such conduct.”

Factors discussed by Justice Kyrou regarding the banning period include “the low risk of the applicant engaging in conduct such as forgery of a document or misleading ASIC in the future; his acceptance of responsibility and remorse; the further study he has undertaken since March 2023; the fact that his conduct did not cause any financial loss to any of his clients; and the fact that, although he benefited financially from his wrongdoing, his financial benefit was not at the expense of anyone else”.

At the time that it handed down the original ban, ASIC explained that it identified Karamian’s conduct through a “proactive review” of individuals who were listed as current financial advisers on the Financial Adviser Register (FAR) despite not having passed the financial adviser exam by 1 January 2022 or 1 October 2022 where the financial adviser qualified for the extension.

The regulator disclosed that as a result of this review, the relevant AFS licensees (or where necessary, ASIC) have corrected the authorisation status or cease dates of over 1,300 individuals.

Australian Financial Services licensees are responsible for updating the FAR within 30 business days following a change to a financial adviser’s information, including whether the financial adviser has passed or failed the FA Exam.