Australian Securities and Investments Commission v Australian Unity Funds Management Limited [2025] FCA 1679

1. The size and financial resources of the contravenor are relevant considerations in assessing whether a penalty is sufficient to achieve deterrence.
2. In the financial year ending 30 June 2025, the Group reported consolidated revenue and other income of $2.6 billion and $136.2 million in adjusted EBITDA. In 2025, the Wealth & Capital Markets business had a total of $15.2 billion gross funds under management, administration and advice. For the financial year ending 2025, AUFM reported total revenue of $75 million and reported losses after tax of $32.6 million. These figures demonstrate that AUFM is a substantial company and part of a substantial corporate group. Having regard to these matters, a large penalty is required to serve the object of specific deterrence.

1. During the Contravention Period, AUFM accepted initial investments of approximately $26,075,361 into the Fund from Relevant Investors. Further, AUFM earned establishment and management fees of approximately $614,240 in respect of those investments.
2. In considering whether any of the Relevant Investors suffered loss as a result of AUFM's contraventions of s 994E(3), it is appropriate to focus on the Red Flag Investors and the Non-Questionnaire Investors rather than the TM Investors. In the case of the Red Flag Investors, a subsequent review of their answers to the Questionnaires they completed indicates that they each provided at least one response that indicated that they were not within the target market for the Fund. In the case of the Non-Questionnaire Investors, in circumstances where they were not required to (and did not) complete a Questionnaire, it is not practicable now to assess whether they fell within the target market for the Fund. The position, therefore, in respect of the Non-Questionnaire Investors, is that some or all of them may have fallen outside the target market for the Fund. On the other hand, in the case of the TM Investors, a subsequent review of their Questionnaires did not indicate that they fell outside the target market for the Fund. In these circumstances, it does not appear that the contraventions impacted the TM Investors.
3. At the very least, it can be said that, as a result of the contraventions, the Red Flag Investors and possibly some or all of the Non-Questionnaire Investors were exposed to the risk that they might have obtained a financial product that was not appropriate to their objectives, financial situation or needs, and to a risk of financial loss.
4. It does not appear practicable to determine definitively whether any of the Red Flag Investors or Non-Questionnaire Investor suffered loss as a result of AUFM's contraventions. This would probably require a counterfactual analysis that takes into account facts and matters pertaining to each investor, that is, an examination of what the particular investor would have done if their application for an interest in the Fund had been rejected. In my opinion, the analysis contained in the Fernandes Affidavit is sufficient for present purposes. This approaches the question in a broad brush way by considering whether any of the Red Flag Investors and Non-Questionnaire Investors are likely to suffer an overall cash loss. Approaching the matter on this basis, it appears that relatively few investors are likely to suffer such a loss.
5. In view of the impacts and potential impacts described above, a substantial penalty is required to achieve the object of deterrence.

1. I accept that the contraventions were not deliberate.

1. ASIC does not allege that senior management of AUFM or AUL were involved in the contraventions.

1. AUFM has not previously been found to have engaged in any similar conduct to the contraventions that are the subject of this proceeding.

1. AUFM has co-operated with ASIC in the course of this proceeding, including by:

(a) proposing a joint approach to resolving the dispute at the earliest possible opportunity;

(b) making admissions of contraventions; and

(c) agreeing to the imposition of an appropriate penalty, as well as declaratory and other relief sought by ASIC.

1. AUFM has thereby demonstrated a significant level of co-operation with the regulator. This is a relevant factor in considering the appropriate penalty and supports the imposition of a lower penalty than would otherwise be imposed.

1. AUFM's remediation plan is outlined at [53]-[59] above. As noted in the Introduction to these reasons, in response to a request from the Court, ASIC provided a supplementary submission dated 18 December 2025 in which ASIC set out its position in relation to AUFM's proposed remediation plan. ASIC stated that it was satisfied that AUFM's remediation plan was "an available approach".
2. The fact that AUFM has adopted the remediation plan is relevant to penalty, in that it ameliorates the impact of the contraventions on the affected investors, and demonstrates that AUFM appreciates the need to address the contraventions.

1. In considering the penalty required for the purpose of specific deterrence, it is relevant to take into account the improvements in AUFM's processes and governance systems outlined at [46] above. These improvements make it less likely that another similar contravention will occur.

1. The parties' joint submissions draw attention to two cases. The first is Australian Securities and Investments Commission v Firstmac Ltd [2025] FCA 12, in which Downes J imposed a penalty of $8 million on Firstmac Ltd for 831 contraventions of s 994E(3) of the Corporations Act following a contested hearing. The second is Australian Securities and Investments Commission v American Express Australia Limited [2024] FCA 784, in which Jackman J imposed an agreed penalty of $8 million on American Express Australia Ltd for two contraventions of s 994C(4) of the Corporations Act. The facts of the cases are briefly described in the parties' joint submissions. Only limited assistance is provided by those cases.

1. In the circumstances of this case, I do not consider it necessary to consider whether the contraventions constituted one or more "courses of conduct".
2. Having regard to the matters set out above, I am satisfied that the penalty proposed by the parties is appropriate. I consider that the penalty is sufficient to achieve the objects of specific and general deterrence.

1. The parties submit, and I accept, that it is appropriate for the Court to make an adverse publicity order in this case in the form annexed to the proposed orders. It provides for a notice, expressed in clear and straight-forward terms:

(a) to be placed on a prominent part of the Australian Unity Wealth & Capital Markets website; and

(b) to be sent directly to the last known email or postal address of the Non-Questionnaire Investors and the Red Flag Investors.

1. For these reasons, I made the declaration and orders proposed by the parties.

I certify that the preceding one hundred and twenty-four (124) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Justice Moshinsky.