Perth authorised representative (AR) company Winley Insurance MD Jeff Bailey resigned almost four weeks before the Australian Securities and Investments Commission (ASIC) cancelled the stricken company’s Australian financial services (AFS) licence.

ASIC issued the notice of cancellation on May 12; Mr Bailey lodged his resignation with the regulator on April 18.

Mr Bailey did not elaborate on his reasons for resigning. The cover letter accompanying the ASIC “Notification by officeholder of resignation or retirement” form contained just one sentence in which he announced his resignation as MD.

ASIC says Winley failed to lodge financial statements, auditor reports and auditor opinions over consecutive years, in breach of legal obligations and licence conditions and despite repeated demands to comply.

It also failed to advise ASIC in writing when it became aware of the “significant breach”.

“The annual lodgement of audited accounts is an important part of a licensee demonstrating it has adequate financial resources to provide the services covered by its licence and to conduct the business lawfully,” ASIC Deputy Chairman Peter Kell said.

“Be clear, ASIC will act on failures to lodge financial statements, resulting in the suspension or cancellation of the AFS licence.”

ASIC says its investigation into Winley continues.

As revealed by insuranceNEWS.com.au, Mr Bailey had sought to contain the damage at Winley after two US-based partners of the business allegedly accessed the company’s broker trust fund.

Leaked emails from Mr Bailey dated April 14 – four days before tendering his resignation – reveal his frantic efforts to shield ARs from the impending fallout of the company’s collapse.

In the emails, seen by insuranceNEWS.com.au, Mr Bailey warns all ARs to discontinue processing business on Winley systems.

“For those ARs that have not chosen a new home, you need to make a decision on your new licensee please urgently [sic],” he wrote.

Premiums that had been paid recently would be returned to clients, he said in the email, and ARs would not receive commissions for that business.

Mr Bailey emailed ARs that “I’m not the person responsible for misappropriating the funds I’m simply trying to mop up the best way I can”. He added that he, too, was owed commissions “that I will not see”.

On April 4, insuranceNEWS.com.au revealed that Winley had collapsed. We subsequently revealed that US-based couple Steve and Chandanie Godwin, who were partners in Winley with Mr Bailey, had allegedly emptied the broker trust account.

A former Winley AR told insuranceNEWS.com.au Mr Bailey had told him he confronted the Godwins about the withdrawal of funds, and they reportedly assured him that “new investors were coming in and monies would be replaced”.

Under the terms of the licence cancellation, Winley will be able to operate for another two years for the purpose of providing a dispute resolution scheme and for the purpose of entering into arrangements for compensating retail clients.