Australia’s financial watchdog has banned a man from providing financial services for five years after a probe showed that he had broken the law and neglected his duties as a director.

The Australian Securities and Investments Commission imposed the ban on Malcolm Philip Bersten of Turramurra in New South Wales. Bersten was an executive director and in-house legal counsel of Provident Capital between July 2007 and January 2012. ASIC suspended Provident Capital's Australian financial services licence on 15 October 2012.

Bersten failed to "exercise due care and diligence" in the management and reporting of the largest loan made by Provident Capital through its Fixed Term Investment Portfolio; he allowed Provident Capital to make inadequate and misleading statements to ASIC and to Australian Executor Trustees (AETL), the trustee of Provident Capital's debenture holders.

ASIC says that Bersten also allowed Provident Capital to issue a debenture prospectus in December 2010 to raise funds from the public and to issue three information booklets (in January, March and April 2012 respectively) to ASIC, AETL and Provident Capital's investors which contained inadequate and misleading statements. He also allowed Provident Capital to make a loan to a related company without obtaining adequate security and to buy a debt of A$775,000 ($560,020) when he was aware that the related company was unlikely to be able to repay the loan.

ASIC has determined that Bersten's lack of attention and failure to act contributed to Provident Capital's financial difficulties and eventual failure.

Bersten has been granted permission to manage the trustee of his family trust and self-managed superannuation fund and his incorporated legal practice. He has applied for a review of ASIC’s decision.