Chapter 6 – ASIC’S reviews of Terry and Florence’s advices


The best examples of ASIC creating false and misleading evidence and then giving it to the Royal Commission are found in Example 3- Advice of Terry McMaster and Example 4- Advice of Florence Tee in the ASIC Paper.

It’s fair to say these led to Dover and Terry being hauled to the 2018 Royal Commission.

This is Case Study 3, ie ASIC’s review of Terry McMaster’s advice to Amit:

This is Case Study 4, ie ASIC’s review of Florence Tee’s[1] advice to Katrina:


What did the ASIC SOA experts say next about Terry’s advice and Florence’s advice?

The ASIC officers paint a pretty poor picture of Terry and Florence’s advice.

They basically say Terry and Florence are behaving illegally and ripping clients off.

It’s the sort of stuff that sees an adviser in gaol. This is ASIC’s summary of its concerns and expected next steps:

In other words, whatever Dover was doing it was so bad ASIC still won’t tell Dover what it was[2].

We can say it must have been very bad or else ASIC would not have blacked it out.

What happened next? Two critical ASIC papers

ASIC’s review of Terry’s advice and Florence’s advice was published on page 5 of the first ASIC paper. This paper should be read in the context of ASIC’s Financial Adviser Unit’s report to ASIC’s Financial Services Unit dated 29 March 2017 titled Stakeholder referral to Financial Services Enforcement[3] (the second ASIC paper).

What did the ASIC experts conclude?

The ASIC officers conclude Dover was spruiking a SMSF property scam (Terry’s advice) and super early access scam (Florence’s advice) to vulnerable clients.

ASIC believed the lead spruikers were Terry and Florence. ASIC wanted to obtain urgent injunctions under sections 1324 and 1101B of the Corporations Act to stop further bad advice and close Dover. ASIC writes at paragraph 1.2 of the Stakeholder Review Paper:

“Alleged misconduct in relation to Dover is attributed primarily to McMaster. He is the sole director and key person and oversees all aspects of the licensee’s compliance framework. McMaster is involved in all operational aspects of Dover and appears to make all decisions.”

ASIC continues at paragraph 3.3

“Given the nature of the findings by FA[4], FA sought early engagement with FSE[5] to assist in the development of a strategy to progress ASIC’s work on this licensee. Joint meetings were conducted between FA and FSE over the December/January period. The purpose of these meetings was to discuss the potential options going forward in relation to the AFS Licence. Specifically, FA was interested in exploring alternative approaches to a negotiated outcome (which has been unsuccessful with this licensee in the past and does not appear to be an effective regulatory outcome given the findings) and an administrative outcome which has also proved to have challenges and limitations in similar licensee matters in the past.”[6]

ASIC expands further at paragraph 5:


What did this mean for Dover?

ASIC wanted to close Dover in 2016. ASIC wanted use Federal Court injunctions under section 1324 and section 1101B of the Corporations Act[7]. These sections are enlivened when ASIC needs to urgently restrain an individual from breaking the law. More specifically, ASIC wanted to restrain Terry, Florence and Dover from spruiking similar client rip-off scams and, presumably, pay damages to clients ASIC expected were financially damaged by Dover.[8]

Why didn’t ASIC close Dover down in early 2017?

For some reason ASIC did not get an injunction to close Dover. Instead, ASIC held fire. ASIC sat on these documents quietly[9] for more than one year. Royal Commission chatter was building all the time: it’s a fair call ASIC was waiting to set Terry up once the Royal Commission was announced.

The McMaster matter was under review all the time. On 20 June 2017 Mr Peter Kell was reported in the IFA magazine saying ASIC wanted powers to “ban those supervising financial advisers” in a clear reference to Terry.  This conclusion is was supported by FOI documents including ASIC emails obtained by Dover in early 2019[10] under FOI requests.

And in November 2017 a falsified Dover case study formed the basis of Tim Mullaly’s Treasury pitch for increased directional powers[11].

The psychology of ASIC: bureaucratic bubble and babble

First the bubble

In ASIC’s bureaucratic bubble it does not pay to find facts different to Peter Kell’s facts once he “engaged on this matter” and “noted a preference” to close Dover.

ASIC’s Stakeholder Referral Paper[12]:

Now the babble

In ASIC’s bureaucratic babble “alternatives to administrative action against the licensee” means “close Dover down any way you can”.

At this point the psychology phenomena of confirmation bias and group-think[13] kick in. At ASIC it does not pay to think differently from everyone else. If Peter Kell decides he wants to close Dover no one will question it. If that is Peter’s goal it is their goal. The ASIC experts knew what was expected. The ASIC officers’ facts fitted ASIC’s Peter Kell’s pre-conclusion.

ASIC was ready to go: Dover was all lined up

ASIC was ready to go when Ken Henry, acting for the 4 big banks who fund ASIC, gave the Prime Minister Scott Morrison permission to announce the Royal Commission on 30 November 2017 [14]. ASIC knew Ken Henry would do this. ASIC was in the loop.

Terry was the ASIC target. Once the Royal Commission was on ASIC moved quickly.


[1] Florence Tee was Dover’s CEO and was one of its three Responsible Managers.

[2] Dover tried four times under the FOI rules: ASIC makes up a different excuse each time to not tell Dover what these paragraphs say,

[3] Obtained from ASIC under the FOI rules

[4] ASIC’s Financial Advice team, headed by Louise Macaulay and Joanna Bird

[5] ASIC’s Financial Services Enforcement team, headed by Tim Mullaly

[6] For completeness, Dover has no idea what negotiated outcome had not been successful in the past. It is not aware of any ASIC negotiated outcomes. This seems to have been made up too.

[7] These sections are rarely used, in fact at the time ASIC had not used them against an individual.

[8] These sections allow for healthy damages payments

[9] There was constant speculation that a Royal Commission was coming throughout 2017. You can get an idea of it here in Ian Verrender’s article published in ABC news on 7 August 2017: How the Commonwealth Bank laid the groundwork for a Royal Commission. One can reasonably assume ASIC knew it would happen.

[10] These e-mails suggest ASIC wanted to shut Dover but did not have enough evidence

[11] Chapter 25

[12] Amazingly, 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 existed or 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 creating a document other that the one you see above, as it appears in the Stakeholder Referral Paper.

[13] Yes, a frankly Orwellian inspired theory. It could be straight out of Orwell’s The Road to Wigan Pier

[14] This was not widely reported by the mainstream press. You can watch the ACTU president Sally McManus explain this series of events here:  Tasmanian Mercury article explaining how Morrison colluded with the banks to water down the banking Royal Commission

The Dover Group