A non-executive director of collapsed subprime lender Provident Capital, which owes thousands of investors $130 million, has been banned from working the financial services industry for two years after being caught providing faulty reports to a subsidiary of embattled financial services giant IOOF.
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Sydney-based John Patrick Sweeney received the ban after an investigation by the Australian Securities and Investments Commission found he engaged in misleading and deceptive conduct.
ASIC's investigation found that between September 2010 and March 2012, Mr Sweeney approved Provident Capital's quarterly reports and benchmark reports issued to the regulator and the IOOF wholly-owned subsidiary Australian Executor Trustees Limited, which was the trustee for Provident's debenture holders.
"ASIC and the community expect directors of companies to behave in a manner appropriate to their position," ASIC Commissioner John Price said.
''ASIC's action against Mr Sweeney demonstrates ASIC will take action against people who fail to meet their obligations."
Mr Sweeney has the right to appeal to the Administrative Appeals Tribunal for a review of ASIC's decision.
ASIC's investigation into Provident Capital is continuing.
In February, ASIC banned Provident Capital's managing director Michael O'Sullivan from managing corporations for five years and from providing financial services for seven years. He has applied to the Commonwealth Administrative Appeals Tribunal to review the ban.
Provident Capital collapsed after Australian Executor Trustees applied for receivers to be appointed to the group.
The group was placed into liquidation in October 2012, leaving more than 3000 Provident debenture holders owed about $130 million.
Provident's receivers, PPB Advisory, have estimated that the likely return to debenture holders will be in the range of $0.17 to $0.19 in the dollar.
