ASIC has suspended Perth-based brokerage Savill Hicks for one year after alleging the company illegally invested $200,000 from its broking account. It also ordered Savill Hicks to replace the money from its own resources.

However, Savill Hicks – which also has offices in Sydney and Melbourne – will be permitted to carry on business as an insurance broker provided it meets additional audit and reporting obligations.

Sean Hughes, ASIC’s Director of Financial Services, said Savill Hicks invested $200,000 from its broking account on two loans of $100,000 to be secured by second mortgages over two houses. The investments were not prescribed under the Insurance (Agents and Brokers) Act, which allows brokers to earn interest on money held in their accounts for 90 days, and allows use of “safe and liquid” investments like government securities and bank deposits, cash management trusts or bills of exchange.

ASIC said that in this case the loans were made to an entity associated with the company’s MD, Stefan Hicks. The loans are now in default and no interest or principal repayments were ever received.