Former Youpla Group CEO Bryn Jones and director Ronald Pattenden breached their duties as directors of the funeral insurance provider, the Federal Court has found.

Mr Pattenden has been disqualified from managing corporations for 15 years and will pay a $250,000 penalty. A later hearing will set penalties for Mr Jones.

Youpla – formerly the Aboriginal Community Benefit Fund – operated several funds providing funeral cover mainly marketed to Indigenous Australians. It entered liquidation in 2022.  

In 2023, the Australian Securities and Investments Commission took action against five former directors.

Decisions on Jonathan Law, Michael Wilson and Geoffrey Clayton are reserved.

Commission chair Sarah Court says tackling misconduct targeting Indigenous people is an enforcement priority for the regulator.

“ASIC has taken decisive action to ensure those responsible for serious governance failures and director misconduct that harmed First Nations people are held to account,” she said. “These breaches went to the heart of trust and responsibility in the First Nations community.”

The regulator alleged that between September 2017 and November 2018, directors and officers maintained arrangements with Vanuatu-based Crown Insurance Services, beneficially owned by Mr Pattenden and Mr Law, that were not in the interests of ACBF entities.

It says the arrangements left policyholders vulnerable to unaffordable premium increases, and First Nations people continued to make payments while being unaware of the risks to the funds’ viability and ability to meet commitments to members.

The government established a financial support program after the collapse of Youpla. Applications closed on June 30, and payments will be processed until December 1.

ASIC says it will provide further comment after the hearing against Mr Jones, and decisions regarding the other directors.

See the judgments here and here.