Chapter 1 – The purposes of this paper and executive summary

ASIC set Dover up at the Royal Commission

This paper proves ASIC created and gave to the Royal Commission a series of documents which are false and misleading. ASIC’s purpose was to damage Dover and its principal Terry McMaster and facilitate the closure of Dover.

The ASIC documents show ASIC wanted to close Dover in 2016. The ASIC documents[1] are:

  1. Dover Financial Advisers Pty Ltd (‘Dover’) – Discussion Paper dated 12 December 2016
  2. Dover Financial Advisers Pty Ltd (‘Dover’) – Memo to Ops dated 31 January 2017
  3. Stakeholder Referral to Financial Services Enforcement dated 29 March 2017.

Each of these documents was provided to the Royal Commission by ASIC. They were accessed from the Royal Commission’s website by Dover for the purpose of research and writing this paper. Each document is heavily redacted. Dover has repeatedly requested ASIC provide un-redacted copies under the FOI protocols but ASIC has refused to do so.

ASIC set up Dover and Terry McMaster at the 2018 Royal Commission. This paper proves it.

Outline of our approach: executive summary

ASIC provided more than 7,000 Dover documents to the Royal Commission[2].  For simplicity, we concentrate on two, being Dover Financial Advisers Pty Ltd (‘Dover’) – Discussion Paper dated 12 December 2016 (the first ASIC paper) and ASIC Stakeholder Referral to Financial Services Enforcement dated 29 March 2017 (the second ASIC paper). These are the most important documents and the basis for most later ASIC Dover documents.

Chapters 3 to 16 analyse key paragraphs from the first ASIC paper and the second ASIC paper. They show each is misleading and deceptive. It is not possible to analyse each paragraph perfectly due to ASIC’s redactions. But we have enough to show a clear pattern of misleading and deceptive behaviour by a surprisingly large number of ASIC executives.

These behaviours include senior ASIC executives creating false evidence about Dover throughout 2016 and 2017 as Royal Commission chatter developed. This false evidence was ultimately provided to the Royal Commission as part of ASIC’s campaign to close Dover and damage its owner Terry McMaster.

Chapters 16 to 22 look at other ASIC behaviours such as the misleading and deceptive conduct of ASIC’s in-house solicitors throughout 2017. Tim Mullaly’s failure and refusal to provide evidence to the Legal Services Board. Louise Macaulay’s misleading letter to Jon Hayward. Joanna Bird’s lies to the AFA to get it to cease its intervention for its members to get extra time to find a new AFSL. Tim Mullaly’s original email on 12 June 2018 to ASIC’s media team is used as a vehicle for detailing how ASIC closed Dover, and then denied doing so. These behaviours are part of an ASIC misleading and deceptive conduct campaign that continues to the present day[3].

Two sets of rules

A recurring theme is ASIC has two sets of rules. One for Dover and one for other AFSLs.

Compare ASIC’s hard line on Dover with its soft touch[4] approach to AMP (and every other large AFSL ASIC deals with). Just read the papers…

Compare ASIC’s 18 months failure to inform Dover of its concerns about the Client Protection Policy with its speed in other cases. In ASIC v Wealth and Risk Management Pty Ltd (No 2) [2018] FCA 59[5] Moshinski J observed:

“… the contraventions were deliberate and extended over a period of a year and a half. The defendants’ (ie WRM’s) flagrant disregard for the financial services laws is highlighted by the fact that the contravening conduct persisted for over a year after ASIC made the defendant aware of its concerns, and ceased only once this Court issued an interlocutory injunction.[6]

WRM contraventions occurred over 18 months. ASIC intervened within 6 months. Obviously ASIC did not dally before it informed WRM of its concerns. Something less than 6 months. ASIC acted promptly. Why did ASIC decide Dover’s client protection policy was deceptive in 2016, but not tell Dover until late March 2018 just before the Royal Commission? Why this delay?

Only malice explains ASIC’s delay.

Chapter 25 shows the first ASIC paper, unchecked, morphing into the November 2017 Treasury case study. This case study argues Treasury, the Attorney General and the CDPP should give ASIC increased directional powers, based on ASIC+

Tim misleads Treasury too.

The psychological phenomena of group think and confirmation bias explains why ASIC staff play the ASIC party line to close Dover. This line was “noted” (but not otherwise recorded in writing) by Peter Kell, in his 2016 direction to close Dover down[7]. Elsewhere such phenomena offer no answers. It’s just sheer ASIC incompetence or malice. Usually both.

Chapter 27 “Mr Hayne’s Helping Hands: how the Royal Commission helped set Dover up” proves the Royal Commission Rock Star Ms Orr hid high probative value contradictory ASIC evidence from the Royal Commission. It alleges this was to mislead the Royal Commission and smash the reputations of Andrew Smith and Adam Palmer. Why did she do this? To smash the reputations of Dover and Terry McMaster and set the stage for Terry appearing as a witness a few days later. There is no other explanation.

This paper proves a partisan ASIC bias against Dover. A malice, a distinct prolonged pattern of misleading and deceptive behaviours from a disturbingly large number of ASIC executives. These behaviours culminate in ASIC forcing Dover to close in early June 2018[8], and then publicly denying involvement while privately applauding the individuals concerned. This public denial starts with an instruction from Tim Mullaly to tell the media Dover closed voluntarily[9] and ASIC did not force Dover to close[10] despite Tim approving a completely contradictory ASIC letter to Dover less than one week earlier.

The ASIC behaviours drip with malice.

These chapters present in a book style. These chapters do not discuss the Client Protection Policy in any depth[11], what happened at the Royal Commission (other than Adam Palmer and Andrew Smith) or what happened after the Royal Commission, other than how ASIC forced Dover to close and then lied about doing so. These are dealt with elsewhere in this book.

Other related complaints

A complaint about the conduct of ASIC’s FSE solicitors was lodged with the Victorian Legal Services Board on 23 March 2019. This is detailed in chapter 17.

Three separate complaints were lodged with the VLSB on 1 April 2019 concerning each of Mr Hayne, Ms Orr and Mr Costello. They concern their suppression of ASIC evidence about Mr Palmer and Mr Smith and misleading and deceptive statements Ms Orr made to the Royal Commission. A similar complaint was lodged with the Office of Legal Services Counsel against the Assisting Solicitors connected to these matters. These are detailed in chapter 27.

The complaints

The over-arching complaint is senior ASIC executives, including Peter Kell, Louise Macaulay, Joanna Bird, Tim Mullaly and Gervase Green intentionally created a false narrative on Dover and Terry McMaster. Their purpose was to ensure Dover was called as a witness at the Royal Commission, to publicly embarrass and shame Terry McMaster and ultimately to close Dover.

The over-arching complaint is proven by 45 related specific complaints against more than 15 individual ASIC executives including Peter Kell, Louise Macaulay and Joanna Bird, Gervase Green and Tim Mullaly.

The irresistible inference: ASIC set Dover up at the Royal Commission

The irresistible inference is ASIC controlled the timing and content of the Dover audit for sinister purposes. ASIC did its best to make sure Terry McMaster would be called as a witness at the Royal Commission. ASIC did this by:

  1. falsifying audit documents to create a false impression of Dover’s compliance processes
  2. denying Dover the opportunity to rectify the Client Protection Policy from 2016 on and
  3. denying Dover the opportunity to rectify other perceived compliance issues, as per Dover’s undertakings to ASIC to rectify any compliance concerns on 1 June 2017.

ASIC created false written evidence of poor compliance by Dover (ie the three ASIC documents listed above) as a base for this set up.

What laws and rules were breached by the ASIC staff involved in the complaints?

The ASIC executives breached numerous laws, rules and standards including:

  1. the Royal Commission Act
  2. breaching their duty of care to Dover and Terry to perform their tasks competently, honestly, for appropriate purposes and not maliciously, incompetently, dishonestly, or for inappropriate purposes
  3. acting negligently, unconscionably and/or maliciously for the purpose of damaging Dover and Terry McMaster
  4. breaching the standards of conduct set out in the Australian Public Service Values and the Australian Public Service Code of Conduct
  5. failing to exercise their powers and functions as public officers in the public interest.

ASIC requests a detailed compendious paper setting out Dover’s complaints

In the period 24 March 2019 to 15 April 2019 Dover lodged a number of complaints with ASIC. The central theme of these complaints is ASIC executives engaging in misleading and deceptive behaviours. These range from straight out lies to sneaky withholdings of information from third parties such as the Victorian Legal Services Board.

On 27 March 2019 Mr Eric Alexiades, ASIC’s Manager Professional Standards, wrote to Dover complaining he was inundated. Eric was having trouble dealing with Dover’s complaints. Eric asked if Dover could help him by putting them all in one document[12].

Dover was perplexed to hear this because each complaint seemed simple enough[13]. (How hard is it to ask someone if they lied, when they obviously did?) Dover is happy to oblige.

Dover took the opportunity to refresh and extend its ASIC complaints and to group them in a more informative order.

 

[1] These three ASIC documents are reproduced in the appendices

[2] As per an October 2018 ASIC FOI refusal to provide documents on practical grounds

[3] For example, a misleading article headed “Not Over Dover” was planted in the Herald Sun on Saturday 20 April 2019

[4] Tim’s touch is so soft one fairly asks who is touching who

[5] Terry McMaster reported WRM s to ASIC in 2013 and again in 2015. This is discussed in chapter 27 A brief note on ASIC v WRM

[6] Terry McMaster reported the WRM matter to ASIC twice. First in 2013 and again in 2015. See chapter 30

[7] ASIC claims there is no other record of Peter Kell’s characteristically awkwardly worded direction to close Dover down. ASIC’s FOI unit advised Dover on 14 March 2019 that no documents could be found which related to this statement. Dover asked for this FOI decision to be reviewed. ASIC reviewed it and on 5 April 2019 affirmed its original decision. It is amazing that an ASIC Deputy Commissioner, Peter Kell, can in effect order his staff to close a large AFSL, ie Dover, without any documents other than the brief note in the Stakeholder Referral Paper.

[8] The closure of Dover is summarised in Chapter 11 “Louise lies: the true story of how ASIC forced Dover to close” and a number of other brief references. The detailed analysis of how ASIC forced Dover to close is left for Part 2.

[9] See emailed 9 June 2018 from Tim Mullaly to Gervase Greene. Gervase Greene then promulgated this deception. See Chapter 18 Tim lied first: how Tim Mullaly damaged Dover and Terry in the media

[10] A formal complaint was lodged with ASIC on 16 April 2019

[11] The Client Protection Policy is discussed in depth elsewhere

[12] Yes, rather than responding, ASIC complained about a complaint… That’s called kicking the can down the road

[13] For an example of how simple these complaints see the complaint dated 15 March 2019 reproduced at the end of this chapter. This relates to Mr Mullaly’s false statements in Case Study 1 in Chapter 17 ASIC deceives Treasury, the Attorney General and the DCPP.

The Dover Group