Former wealth manager faces prison, fines

A former Melbourne director is facing jail time and fines after breaching a court ordered ban from working in financial services companies.

Generic ASIC man

A former wealth management company director who was banned from the industry is facing prison and penalties after the corporate watchdog alleged he breached court orders by continuing to work.

The Australian Securities and Investments Commission on Thursday revealed it lodged a contempt application with the Federal Court against Joshua Fuoco, who they accused of working in five financial services companies between March 2019 and April 2023 after he was banned from the sector for 10 years in 2018.

The court in 2018 found Mr Fuoco had contravened financial services obligations and engaged in unconscionable conduct when three companies he was a director of offered cash to financially vulnerable clients.

Conduct included advertising “fast cash” to consumers with poor credit histories seeking loans, instructed consumers to switch their superannuation and take out “high-end insurance” and received upfront and trailing commissions for advice.

This often lead to a “substantial erosion” of the client’s superannuation balance, ASIC said.

The financial advice companies, which included Wealth and Risk Management, Yes FP and Jeca Holdings were penalised $7.1m and Mr Fuoco — who the court said was “knowingly involved in the breaches” — was fined personally $650,000.

The companies were restrained from carrying on a financial services business for 18 years and were permanently barred from making offers of cash payments when giving financial advice.

He also agreed to an order restraining him from providing financial services and was could not carry on, or be involved in, a financial services business for 10 years.

But ASIC claimed on Thursday he breached these orders, having been involved in financial services via five companies in the past four years.

Those companies included State Advice, Ansa Advice, AFSL Group, About Advice and Advice Now.

If Mr Luoco is found liable could face a fine, asset sequestration or a term of imprisonment.

The original ban preceded the Kenneth Hayne banking royal commission, which in 2019 lead to a crack down on poor financial advice that resulted in bad outcomes for consumers.

Through a case study approach, the commission heard evidence from witnesses who were vulnerable consumers who were taken advantage of for low financial literacy.

As well, it found financial advisers lacked skill and judgement and gave advice that benefited the company.

The commission recommended grandfathered conflicted remuneration be stripped of financial advice business models, as well as recommending life insurance commissions be reduced to zero and annual consent to fees.

A code of ethics was set up and a new disciplinary body was set up within ASIC.