Reasons behind Lance Rosenberg’s Ban Overturn
The AAT or Administrative Appeals Tribunal overturned the order of banning which was imposed to Mr. Lance Rosenberg (Director of Tricom Equities Limited) by ASIC from providing financial services for 4 years. Though the decision process is still there for review, there are interesting comments which actually were made.
The conduct giving in fact that was caused to the banning order which is related with the actions of Rosenberg about the security that Tricom and being held by it as a security for loans had on-let to Opes Prime. Also, Opes Prime had administrators that was appointed back in March 27, 2008. Having on-lent securities to Opes Prime as becoming concerned on the ability of Tricom in recovering from securities, Rosenberg actually spent days for them to get good advice from corporate advisers and from insolvency securities with regards to options on how you can recover it.
Before putting in place the special crossing, Rosenberg actually continued on with the communication with the ASX about the position. When he was actually in that special crossing, Rosenberg implemented a negotiation with the lenders and settled the crossing before it was actually due for them in financing the acquisition on securities as well as to cancel the special crossing.
The AAT also considered different expert evidence and the ASX Listing Rules to the case where they relate to the off market transactions like special crossings and the information which is available for investors with regards to such transactions.
The AAT also sees such special crossing as off market transactions to where transactions which is specific on ASX had been transacted off market through a special crossing price and comes with no relation on its market prices for security.
This in fact is where the AAT had came on the conclusion that the evidence be provided by the ASIC didn’t make it out that the relevant sections of Corporations ACT had been contravened. An addition with the question of evidence with regards to certain contraventions, the context to making out the banning order was considered later on.
AAT likewise considered that the banning orders become discretionary and should never be required of being imposed by the ASIC. The main purpose of such banning order is in providing protection to the public as well as to act as a form of deterrent to the person that’s concerned and to other participants as well who are in the market.
The case of providing the necessary comfort to directors while an ASIC delegate takes the action under time pressure through difficult time is in breach or does not go along with the law. The AAT are considering a broader set of circumstances in different options to a director, which includes the ones available to Mr. Rosenberg in seeking recovery from the securities and that an off market transaction was unlikely to prejudice the investing public.