FBAA president Peter White has defended the association taking on a member who had previously been ousted by the MFAA.
MFAA president Phil Naylor has told Australian BrokerNews that Chris Riotto, whose companies have been found by a Federal Court to have acted unconscionably, was expelled from the association in 2004. But White has defended the FBAA taking Riotto on and keeping him as a member for 7 years, saying the decision was based on the best information at the time.
White, who was NSW state president at the time Riotto was admitted to the FBAA, said the ultimate decision on Riotto’s membership was not his, but that he had supported the membership bid in spite of Riotto being expelled from the MFAA. White claimed the information at the time led the FBAA to conclude that Riotto had been unfairly expelled from the MFAA.
“We had a chat with him, and with his solicitor. We went through everything and determined that the guy was hung by a kangaroo court. At that time, ASIC did go through his receivables and did a full audit on his systems and loan files, and they gave him a complete bill of health. So we had no grounds to reject his membership,” White said.
Through discussions with Riotto’s solicitor at the time, White said he had been satisfied that any wrongdoing had been on the part of one of Riotto’s employees, who Riotto had subsequently terminated.
“Are we going to say to a major bank that if one of their staff commits an act of fraud they can’t be a member of an association?” White said.
But the Federal Court found that Riotto was knowingly involved in contraventions and unconscionable conduct. White still argued that, given the information available, the FBAA acted appropriately.
“He held an ACL and was licensed in WA. ASIC had ticked off those boxes. We made the best and only decision we could make given the information we had at the time. This could have happened to any association. It could have happened to one of the banks, or the MFAA. We can all be heroes in hindsight,” he said.
Regardless of the association’s past decision, White has vowed it will now take disciplinary action against Riotto in light of the new information.
“If ASIC says it’s all good, it’s all good. Today they say it’s not good. Today they’re saying something different, and so are we,” White said.
FBAA vows to eject 'unconscionable' broker
Federal Court finds against former NSW FBAA head