ASIC Deputy Chairman Peter Kell said, 'The Targeting Scams report published today by the Australian Competition and Consumer Commission (ACCC) shows reports to Scamwatch on investment scams increased in 2016. ASIC is alerting the public to ways to stay informed and protect themselves from scams.
BUILDING companies that work for a developer financed by self-managed superannuation funds have an unhealthy habit of going broke leaving subcontractors unpaid.
ASIC has banned Mr Adrian Chenh and Mr Bill El-Helou from providing financial services for a period of five years each following an ASIC investigation.
ASIC’s investigation found that Mr Chenh and Mr El-Helou provided advice to clients that was in breach of the best interests duty introduced under the Future of Financial Advice (FOFA) reforms.
The corporate regulator has launched a major investigation into hundreds of funds in a bid to uncover unlicensed SMSF advice.
As reported by ifa sister publication SMSF Adviser earlier this year, ASIC is currently conducting a major shadow shopping exercise, and has now started contacting various SMSF professionals to collate data on the set-up process of hundreds of funds, as part of a massive research project set for release later this year.
In emails seen by SMSF Adviser, it is clear ASIC has selected several hundred funds that were set up in September 2016 for random investigation, and is contacting tax agents associated with the funds.
ASIC is asking if the clients of the tax agents received any professional advice about establishing their SMSF and, if so, that the contact details are passed on.
While ASIC is gathering details about both financial advisers and accountants as part of this project, it is understood that broadly, unlicensed accountants in particular are on the regulatory radar.
The information supplied to ASIC is treated as anonymous, but the general findings will be published in a report slated for the second half of this year, an ASIC spokesperson told SMSF Adviser.
ASIC could not outline any further details of the investigation, except to confirm that it is pursuing its “major” shadow shop as announced in February, and will be looking at random samples of SMSF advice.
Despite being relatively lax in the past to instances of accountants operating outside of the accountants’ exemption in particular, BDO’s national leader for superannuation Shirley Schaefer suggested ASIC will be taking no prisoners this time around.
“I suspect a lot of accountants have sat outside the accountants’ exemption for years, and ASIC never did anything about it in the past,” Ms Schaefer told SMSF Adviser.
She acknowledged that many accountants do not agree that the SMSF services they are providing fall into the financial advice category, an argument that is largely irrelevant in 2017.
“This is not just tax advice. I certainly believe [SMSFs are] a structure not a product, but that argument is gone. There’s no point having that one again. We’ve been there and it’s gone,” Ms Schaefer said.
Article from: Independent Financial Advisor
KATARINA TAURIAN- Wednesday, 29 March 2017
Following an ASIC investigation, Mr. David St Pierre, a former Westpac Home Finance Manager, has been sentenced in the Southport District Court to 3 years imprisonment, to be released after 6 months on a recognisance order.
On 2 November 2016, Mr St Pierre pleaded guilty to three counts of dishonest use of his position, with the intention of directly or indirectly gaining an advantage for himself or others.
ASIC alleged that between July 2008 and June 2010, Mr St Pierre dishonestly used his position and submitted loan applications for approval when he knew they contained false information and false documents.
Mr St Pierre obtained over $2.5 million for Westpac customers, that they invested with a now failed Tasmanian property development scheme, operated by Capital Growth International Club Pty Ltd (CGIC) and All About Property Developments Pty Ltd (AAPD) (refer: 15-137MR).
In delivering the sentence, Judge Kent QC remarked that Mr St Pierre's behaviour was described accurately in his opinion by the Crown as calculated, elaborate, determined and not a fleeting mistake.
ASIC Commissioner Peter Kell said: "Mr St Pierre's actions betrayed the trust of his clients and caused them significant financial harm. This sentence showed such behaviour will not be tolerated.'
The matter was prosecuted by the Commonwealth Director of Public Prosecutions.
Mr St Pierre's recognisance is in the sum of $1000, conditioned that he be of good behaviour for a period of 3 years.
ASIC's investigation found that the customers to whom the loan applications related were elderly and vulnerable and with limited financial means, yet in spite of this, Mr St Pierre encouraged them to borrow against their homes, some of which were unencumbered, to invest with CGIC and AAPD, which promised returns of 12–20% per annum.
The customers received monthly interest payments from CGIC and AAPD after they invested, however the interest payments stopped shortly before a liquidator was appointed on 28 February 2011. This left customers without sufficient income with which to repay their loans to Westpac.
Westpac has compensated customers who obtained loans from Westpac through Mr St Pierre in relation to amounts they invested in CGIC. Westpac has also compensated investors who did not borrow funds from Westpac but claimed to have had some direct contact with Mr St Pierre before making their investment in CGIC. ASIC acknowledges Westpac's commitment to achieving a resolution for the benefit of CGIC investors. (refer: 14-264MR).
In March 2014, ASIC permanently banned Mr St Pierre from engaging in credit activities and providing financial services (refer: 14-043MR).
ASIC'S investigations into CGIC, AAPD and its officers are ongoing.
Mr Bernard Meehan, a former mortgage broker for AHL Investments Pty Ltd (trading as Aussie Home Loans), has been permanently banned from engaging in credit activities by ASIC.
ASIC's investigation found that Mr Meehan had submitted payslips, document checklists and loan serviceability forms in nine home loan applications to Westpac Banking Group (Westpac) over a twelve month period from January 2014 to January 2015, that were false or materially misleading. Among the false documents were payslips that had not been issued by the purported employer.
ASIC found that Mr Meehan's actions were wrong, inconsistent with a compliance mentality and showed a lacked of insight into what was required of a broker. Mr Meehan failed to adhere to proper procedures and did not accept wrongdoing or show appreciation of the fact that what he did involved failure to comply with credit legislation.
Aussie Home Loans reported the misconduct to ASIC.
ASIC's Deputy Chairman Peter Kell said, 'Gatekeepers, such as banks, aggregators and franchise groups have an important role to play in regulating the mortgage broking industry and act as a first line of defence to detect inappropriate practices and behaviour.'
Mr Meehan has the right to appeal to the Administrative Appeals Tribunal for a review of ASIC’s decision.
Since becoming the national regulator of consumer credit on 1 July 2010, ASIC has investigated in excess of 100 matters relating to loan fraud and has achieved many enforcement outcomes against the offenders.
The outcomes range from undertakings by persons to voluntarily leave the industry to bans and prosecutions. To date, ASIC has banned 74 individuals or companies from providing credit services (including 32 permanent bans).
Through the Commonwealth Director of Public Prosecutions, ASIC has also brought criminal prosecutions against 14 credit service providers; with 12 having been convicted of fraud or dishonesty offences relating to the provision of false and misleading information/documents to lenders in client loan applications.
Mr Meehan is the fourth Aussie Home Loans mortgage broker who has been permanently banned and/or convicted over the past 18 months for submitting false or misleading documents in loan applications. The other three mortgage brokers were:
- Mr Madhvan Nair – convicted on eighteen charges involving the submission of false or misleading information to Westpac, National Australia Bank, and ANZ, see 16-219MR and 16-293MR.
- Ms Emma Feduniw – convicted and permanently banned for providing false documents in eight loan applications to Westpac, see 16-108MR, 16-186MR and 16-242MR.
- Mr Shiv Prakash Sahay – convicted and permanently banned for providing false documents in loan applications for seventeen of his clients to Bankwest and Suncorp Metway Limited, see 15-176MRand 15-128MR.
The Federal Court has declared that land banking developments operated by Jamie and Dennis McIntyre were unregistered managed investment schemes in a decision delivered by His Honour Justice Bromwich on 17 October 2016.
The Court also made orders that Jamie and Dennis McIntyre be disqualified from managing corporations and restrained from carrying on financial services for a period of 10 years each, due to them being officers of companies that had failed, by virtue of them being wound up, and which had also repeatedly contravened the Corporations Act .
Jamie and Dennis McIntyre agreed to the banning orders made against them.
Further, the Court made orders to wind up the unregistered managed investment schemes, which were promoted and advertised by the 21stCentury land banking companies*.
The unregistered managed investment schemes are known as:
- Botanica, located at 805 Archer Rd, Kialla, Victoria 3631
- Secret Valley Estate, located at955, Old Sydney Road, Bylands, Victoria 3762
- Oak Valley Lakes Estate & Resort, located at 124 Booth Road, Brookhill, Townsville, Qld 4816
- Bendigo Vineyard Estate & Resort, located at51 Andrews Road, Bendigo, Victoria 3551
- Melbourne Grove Estate, located at1491 Dohertys Road, Mount Cottrell, Victoria 3024
Simon Wallace-Smith and Robert Woods of Deloitte have been appointed as joint liquidators of the unregistered managed investment schemes.
ASIC Commissioner Greg Tanzer said, "The high banning periods ordered by the Court in this case are necessary to protect the public from those who are officers of companies that repeatedly contravene the Corporations Act. It also serves as a warning to those involved in unlawful unregistered managed investment schemes, including those that involve land banking, that ASIC will take action."
ASIC's investigation into the matter is ongoing.
ASIC commenced proceedings in August 2015 against Jamie and Dennis McIntyre and the 21st Century land banking companies in relation to their promotion and sale of interests to investors in five land banking schemes (Refer: 15-214MR).
ASIC’s proceedings are part of ASIC's wider and ongoing investigation into land banking schemes.
*Jamie McIntyre refers to his companies as the "21st Century Group". 21st Century Group Pty Ltd (ACN 108 150 545) is not a defendant to the proceeding, and ASIC is not aware of any connection between 21st Century Group Pty Ltd and the defendants.