ASIC Initiates Civil Penalty Proceedings Against Fintech Squirrel Superannuation Services

​The Australian Securities and Investments Commission (ASIC) announced that it has initiated civil penalty proceedings in the Federal Court on 23 December 2020 against Squirrel Superannuation Services Pty Ltd (Squirrel), an Australian fintech, for false or misleading representations.

Squirrel holds an Australian Financial Services licence (AFSL) and its platform allows clients in Australia to self manage their super funds. According to the Australian regulator, Squirrel published and distributed a brochure entitled 'How Buying Established Residential Property Can Super Charge Your Superannuation?' in March 2015. From then till July 2018, the financial technology firm provided the brochure to thousands of people by email and distributing hard copies.

In its brochure, Squirrel made misleading representations that certain average returns could be obtained through using self-managed superannuation funds (SMSF) to purchase residential investment property. This misleading statement was backed up by false declaration of estimated returns as well as the value of residential property and the amounts of SMSFs.

ASIC highlighted that supporting the Australia's superannuation system is one of its key priorities. Through the provision of misleading information about SMSFs, Squirrel undermines the SMSF sector and limit the ability of consumers to make confident and informed decisions about superannuation savings. ASIC, therefore, took actions to seek declarations, pecuniary penalties and cost orders against Squirrel.