ASIC bans two NextGen directors

ASIC has banned two former directors of NextGen Financial Group, Nicholas Brookes and Vitorio Turco, for failing to pay several AFCA determinations dating back to 2022.

The pair have been slapped with a three-year ban each from controlling or being involved in the management of a financial services business.

Back in 2022, AFCA determined that NextGen should pay around $270,000 to an SMSF trustee who received advice to purchase an investment property through their fund.

They’d set aside $175,000 for the purchase, nearly all of which was invested in a loan fund with a one-year term.

That fund subsequently collapsed, preventing the trustee from settling on the property.

NextGen didn’t respond to AFCA’s decision, and the trustee ended up issuing a statutory demand for the unpaid determination.

In court, the advice firm argued that an AFCA determination couldn’t be enforced via statutory demand and that the trustee would need to secure a court order before any legally-recognised debt was owed.

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The court dismissed NextGen’s argument, which allowed the trustee to initiate wind-up proceedings.

NextGen is now in liquidation and ASIC cancelled its AFSL in 2024.

Given that the firm never paid these determinations, all NextGen complaints ended up in the Compensation Scheme of Last Resort.

ASIC alleged that both Brookes and Turco were linked to NextGen’s refusal or failure to give effect to at least two AFCA determinations, including this one.

The Compensation Scheme of Last Resort paid $150,000 to the above SMSF, although one of the trustees, Vicki Alexopoulos, said $30,000 of that amount went to legal and financial advice fees.

Alexopoulos said: “We are out quite substantially from what AFCA and the Federal Court ordered NextGen to pay us, and we are out even more substantially if our initial investment had not been tampered with and our purchase was able to happen.”

She added: “Ultimately, ASIC could have helped us long before, however chose not to, costing us a great deal of money – to add insult to injury – which had to be paid from our compensation amount.”