ASIC has today commenced proceedings in the Federal Court of Australia against RI Advice Group Pty Ltd (RI), an Australian Financial Services (AFS) licence holder, for failing to have adequate cyber security systems.
ASIC’s action follows a number of alleged cyber breach incidents at certain authorised representatives (ARs) of RI, including an alleged cyber breach incident at Frontier Financial Group Pty Ltd as trustee for The Frontier Trust (Frontier) from December 2017 to May 2018.
RI was, until 1 October 2018, a wholly owned subsidiary of Australia and New Zealand Banking Group Limited. On 1 October 2018, RI became a wholly owned subsidiary of IOOF Holdings Limited (IOOF).
ASIC alleges that Frontier was subject to a “brute force” attack whereby a malicious user successfully gained remote access to Frontier’s server and spent more than 155 hours logged into the server, which contained sensitive client information including identification documents.
ASIC alleges that RI failed to have implemented (including by its ARs) adequate policies, systems and resources which were reasonably appropriate to manage risk in respect of cybersecurity and cyber resilience.
ASIC is seeking:
- declarations that RI contravened provisions of the Corporations Act, specifically sections 912A(1)(a), (b), (c), (d) and (h) and (5A);
- orders that RI pay a civil penalty in an appropriate amount to be determined by the Court; and
- compliance orders that RI implements systems that are reasonably appropriate to adequately manage risk in respect of cybersecurity and cyber resilience and provide a report from a suitably qualified independent expert confirming that such systems have been implemented.
ASIC’s regulatory resources include further information about cyber security and cyber resilience:
- Cyber resilience good practices
- REP 429 Cyber resilience: Health check
- REP 651 Cyber resilience of firms in Australia’s financial markets: 2018-19
- REP 555 Cyber resilience of firms in Australia’s financial markets