Three former Youpla Group board members have been disqualified from managing corporations and ordered to pay penalties after a court found they breached director duties.

Jonathan Law was disqualified for six years and ordered to pay $50,000, Michael Wilson was disqualified for 10 years and must pay $20,000, and Geoffrey Clayton was disqualified for five years and told to pay $20,000.

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

The Australian Securities and Investments Commission – which says misconduct harming First Nations people is an enforcement priority – started proceedings against five Youpla directors in 2023.

The Federal Court has found Mr Law breached his duties in relation to one of the group companies, while Mr Wilson and Mr Clayton breached duties in the case of three companies.

“These directors failed in their responsibilities and their conduct contributed to serious harm to First Nations consumers,” ASIC commissioner Alan Kirkland said.

“Directors have important responsibilities. The failures at Youpla demonstrate the consequences when those responsibilities are not met.”

At a previous hearing, the court found former Youpla Group CEO Bryn Jones and director Ronald Pattenden had breached their duties.

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

The regulator said 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 said 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.