Australia's financial regulator has acted against the former director of a firm due to failures to comply with laws against misleading or deceptive conduct.

Australian regulatory authorities have banned the former director of Provident Capital from providing financial services for two years because of failures to comply with financial services laws by engaging in misleading or deceptive conduct.

The Australian Securities and Investments Commission has banned John Patrick Sweeney, who is based in Sydney and is the former non-executive director of Provident Capital, ASIC said in a statement last Friday.

ASIC’s investigation found that Sweeney engaged in misleading or deceptive conduct in relation to a financial product. Sweeney approved Provident Capital’s quarterly reports and benchmark reports issued to ASIC and Australian Executor Trustees from September 2010 to March 2012, according to the statement.

Earlier this year ASIC also banned Michael Roger O’Sullivan, the former managing director of Provident Capital, from managing corporations for five years and from providing financial services for seven years. The regulator found that he breached his duties as a director and failed to comply with a number of financial services laws. O'Sullivan has sought a review of ASIC's decision in the Commonwealth AAT.

Provident Capital issued debentures to retail investors through their fixed term investment portfolio and advanced the debenture funds to third party borrowers, including property developers, on a first mortgage basis. Provident Capital also operated a mortgage fund under a wholesale facility with Bendigo and Adelaide Bank and two managed investment schemes, ASIC said.

Provident Capital went into receivership on 3 July 2012, its financial services licence was suspended by ASIC on 15 October 2012 and the firm went into liquidation on 24 October 2012.

When Provident Capital went into liquidation on 24 October 2012 over 3,000 Provident debenture holders were owed approximately A$130 million ($97.8 million). Provident’s receivers, PPB Advisory, have estimated that the likely return to debenture holders will be in the range of A$0.17 to A$0.19 in the dollar.

ASIC is continuing to investigate Provident Capital.

Sweeney has the right to appeal to the Administrative Appeals Tribunal for a review of ASIC’s decision.