Australian Securities & Investments Commission appeals AUD 7 million penalties in Cigno and BSF unlicensed credit case

The Australian Securities & Investments Commission has appealed the Federal Court order requiring Cigno Australia, BSF Solutions and their directors Mark Swanepoel and Brenton Harrison to pay combined civil penalties of AUD 7 million, arguing the penalties are too low to provide adequate deterrence. The penalties followed findings that the companies engaged in credit activity without a licence and charged consumers fees prohibited under credit laws, with the two directors involved in those breaches. ASIC says the lending model generated more than AUD 90 million in unlawful fees and that operating without a licence deprived consumers of rights and protections under the credit legislation. It also says the respondents have not carried out any remediation for the consumer harm. Beyond the penalty amount, the appeal asks the Full Federal Court to clarify whether a respondent can rely on legal advice in mitigation without tendering that advice to the court, and whether the "benefit obtained" for penalty purposes should be measured by profit or by gross revenue. The underlying liability findings had already been upheld by the Full Federal Court, and the High Court later dismissed an application for special leave to appeal by the two directors. The appeal will be heard by the Full Federal Court on a date yet to be set.