The Australian Securities and Investments Commission (ASIC) has taken action against an insurance underwriting agency, Triton, and Sydney insurance broker Aradlay over their alleged business links with an unauthorised foreign insurer (UFI) operating from the Cayman Islands.

The regulator obtained injunctions in the NSW Supreme Court late last week preventing Triton Underwriting, Aradlay and Trans Pacific Insurance Corporation from taking or sending any capital belonging to them out of Australia.

The action was against Triton MD Ian Douglas and Executive Director Greg Bunt, who ASIC said are also directors of Trans Pacific. Mr Douglas is also the founder of Aradlay Insurance Brokers. ASIC said in a statement that it “became aware” of the activities of Triton and Trans Pacific earlier this year as part of a campaign which examined UFIs.

While declining to grant ASIC’s interim application to restrain Triton and Trans Pacific from arranging or issuing insurance policies due to “the balance of convenience in this particular case”, the court did find Triton and Trans Pacific were in contravention of the law for carrying on a financial services business without holding an Australian Financial Services licence.

And the court said its decision wasn’t to be construed as sanctioning unlawful behaviour, warning the companies they run a “serious risk” if they choose to operate without a licence.

ASIC said it is concerned that any of the three companies may have made or published statements and/or disseminated “false, misleading or deceptive” information. Last month Aradlay gave undertakings to the court, without admissions, to remove from its website all references to Triton and Trans Pacific and their products or financial services.

Mr Douglas told Sunrise Exchange News ASIC actually lost out in court on many of the injunctions it brought against Triton and Trans Pacific.

In a statement, Triton said it had applied for its Australian financial services licence in July. Prior to the application being lodged it believed it was entitled to the benefit of the transitional provisions of the Financial Services Reform Act. It said it believed it would not need to operate under the Act until March 2004.

“We are now advised that this view is incorrect,” Mr Douglas said.