Australian Securities and Investments Commission v DOD Bookkeeping Pty Ltd (in liq), in the matter of DOD Bookkeeping Pty Ltd (in liq) (No 2)

This proceeding was brought by ASIC against DOD Bookkeeping Pty Ltd, an Australian financial services licence holder that was in liquidation by the time of the penalty decision. The company employed three advisers referred to in the judgment as Advisers XX, YY and ZZ. The case was already partly decided before this 2025 judgment. In the earlier liability decision, the Court found that contraventions had been established. The later decision then dealt with what declarations should be made, what penalties should be imposed, whether ASIC could reopen part of the earlier reasons, and who should pay costs.

The commercial pattern identified by the Court is important. Across 12 client matters, the advisers gave personal advice in Statements of Advice that included recommendations to establish an SMSF and have the SMSF trustee borrow money and buy real property. The Court declared that the advisers failed to act in the clients' best interests and gave advice that was not appropriate. Because DOD Bookkeeping was the responsible licensee, the company itself was exposed under the Corporations Act.

The case did not stop with advice quality. The Court also dealt with a large number of bonus payments made to the advisers. Those payments were treated as conflicted remuneration contraventions, both on the acceptance side and on the giving side. That means the case is about the interaction between advice processes and remuneration design, not just one or the other.

The declarations identify 12 client matters. They include couples and individual clients, each anonymised by initials. In each matter, the adviser provided personal advice in a Statement of Advice. The Court declared paired contraventions for each client matter. One declaration concerned a failure to act in the client's best interests under s 961B. The other concerned advice that was not appropriate under s 961G.

The recommendation pattern was consistent. The advice included a recommendation that the client establish an SMSF and cause the trustee of that SMSF to borrow money and purchase real property. The dates of the Statements of Advice ranged from May 2015 to February 2018. The advisers involved varied across the files, with Advisers XX, YY and ZZ each appearing in different matters.

For a business reader, the significance of this repeated pattern is practical. When many files involve a similar structure or strategy, the Court may closely examine whether the recommendation was genuinely tailored to each client or whether the business was effectively steering clients toward a preferred outcome. The judgment does not set out the full personal circumstances of each client, so this page cannot go further than the declarations themselves. But the declarations alone show that the Court treated the advice as failing the statutory standards in each listed matter.

The second major part of the case concerned bonus payments to the advisers. The Court declared contraventions under s 963E when advisers accepted conflicted remuneration and under s 963J when the company gave that conflicted remuneration. The orders list many separate bonus payments across different periods and advisers.

The listed payments were not all large. Many were $750 or $1,000, and one listed payment was $1,500. But the Court treated each relevant occasion separately. The declarations covered Adviser YY for a 2017 grouping, Adviser ZZ for a 2017 grouping, Adviser XX for a 2018 grouping, Adviser YY for a 2018 grouping, and Adviser ZZ for a 2018 grouping. The total bonus amounts listed in those groupings were $20,500, $18,500, $9,750, $45,000 and $36,500 respectively, with matching giving and acceptance declarations.

The reasons also show that ASIC tried to amend parts of the earlier liability judgment to add more remuneration detail to a table and to remove part of a sentence about the significance of bonuses. The Court reproduced the relevant parts of the earlier reasons, including a passage stating that the availability of, and expectations to receive, bonus payments could reasonably have been expected to influence both the choice of financial product recommended and the advice given. ASIC's interlocutory application to recall those parts of the earlier judgment was dismissed.

For businesses, the practical lesson is that conflicted remuneration risk is not measured only by the size of each payment. Frequency, pattern, timing and connection to advice outcomes can all matter. A modest recurring bonus can still create serious exposure if it is capable of influencing recommendations.

By the time of this judgment, the Court had already decided that contraventions occurred. So the main legal task in the 2025 decision was different from a standard liability hearing. The Court had to determine the declarations to be made under s 1317E and the pecuniary penalties to be imposed for the established contraventions. It also had to deal with ASIC's interlocutory application under the Federal Court Rules and with costs.

The judgment records that there were 24 Division 2 contraventions and 272 Division 4 contraventions. The Division 2 contraventions arose because the company, as responsible licensee, was liable under s 961K(2) for representatives' contraventions of ss 961B and 961G. The Division 4 contraventions arose from the provision to, and acceptance by, representatives of conflicted remuneration in the form of bonus payments.

That procedural setting matters for business readers. This was not a case where the Court was still deciding whether the advice was good or bad in a broad sense. Those findings had already been made. The penalty decision shows what can happen after liability is established, especially where the conduct is repeated across multiple files and many remuneration events.

The Court made 24 declarations for the Division 2 contraventions. For each of the 12 client matters, there was one declaration tied to the representative's failure to act in the client's best interests under s 961B and one declaration tied to the representative giving advice that was not appropriate under s 961G. In each instance, DOD Bookkeeping was declared to have contravened s 961K(2) as the responsible licensee.

The Court also made declarations for the Division 4 contraventions involving conflicted remuneration. These covered both acceptance by the advisers and giving by the company. The judgment states that there were 272 Division 4 contraventions in total.

The Court then imposed specific pecuniary penalties. For the 24 Division 2 declarations, the penalties ranged from $300,000 to $395,000 per declaration. For the Division 4 declarations, the Court imposed grouped totals of $220,000, $220,000, $200,000, $200,000, $130,000, $130,000, $450,000, $450,000, $360,000 and $360,000 across the listed declaration groups. The Court dismissed ASIC's interlocutory process filed on 11 March 2024 and ordered the defendant to pay ASIC's costs of the proceeding, except for the costs of that unsuccessful interlocutory application.

The orders are a clear example of how repeated contraventions can produce very large aggregate penalties, even where some of the underlying bonus payments were individually modest.

Business owners should read this case as a warning about repeatable compliance failures. The Court's declarations suggest a recurring advice pattern across multiple clients. That is risky because a repeated strategy can look less like tailored advice and more like a standardised sales pathway if the file does not clearly show why the recommendation suited that particular client.

The remuneration findings are equally important. A business may think a bonus is harmless because the amount is small, but the Court's orders show that repeated payments can still be treated as conflicted remuneration contraventions. The legal and commercial risk grows quickly when those payments sit alongside advice that is already under challenge.

For an AFSL holder, the case also reinforces that supervision and governance are not side issues. Licensee responsibility means the business itself can face declarations and penalties because of representative conduct. Owners and managers should therefore review advice quality controls, approval processes, file documentation, training, monitoring and remuneration settings as one connected system.

If your business uses incentives, the safest practical question is not only whether the payment is common in the industry, but whether it could reasonably be expected to influence the recommendation or advice. If the answer may be yes, the structure needs close legal review.

The penalty judgment was delivered on 24 April 2025 by Goodman J in the Federal Court of Australia. The hearing date recorded in the extract is 5 June 2024, and the date of last submissions is recorded as 27 June 2024. The judgment expressly says it should be read together with the earlier liability judgment delivered in 2023.

The conduct itself occurred before the changes introduced by the Treasury Laws Amendment (Strengthening Corporate and Financial Sector Penalties) Act 2019 (Cth), and the Court said the reasons addressed the Act in the form that applied at the time of the contraventions.