ASIC, stands for Australian Securities and Investment Commission, aims to maintain public confidence by improving sales and disclosure practice in the financial advisory industry. And its role implement the legislation, which is the watchdog for consumer protection laws in financial products and services.
In order to protect investors, ASIC approves FSRA to require a licensing regime for financial products advice, sales and dealings, and a single set of requirements for financial sales and advice, and disclosure documents. In this case, we should focus on the disclosure requirement, since the prospectus appeared in the case is the key disclosure document for managed investments of product disclosure statement(PDS). RG 168 recognizes the PDS provisions and contains general guidelines to help product issuers and to promote the objectives of these provisions, that is, making informed choices and helping consumers to compare financial products. According to this case, Mr Lewis, as a director of Altitude Property Limited, failed to disclose material information in the prospectus to investors. More specifically, investors had no idea that an incentive payment agreement had been entered into and their funds raised would be paid to another company. AS a director of a public firm, he has the obligation to inform their investors of the details of the products or services, and the investors also have the right to be informed the use of their money. An occasion may appear if the investors were informed that a part of their funds raised is going to other company, they may choose not to invest in the company. Undoubtedly, Mr Lewis`s behavior is unethical because he deceived the investors in somehow, and breached the regulation of ASIC. Apart from the requirements of ASIC mentioned above, ASIC also administer the following legislations: Corporation Act 2001(including the Corporations Regulations), Australian Securities and Investments Commission Act 2001, Insurance Contracts Act 1984 and Superannuation Act 1993. All of these legislations can help to