The Australian Securities and Investments Commission (ASIC) has made submissions to the Federal Court seeking orders to impose bans on parties involved with ActiveSuper and Royale Capital, who are deemed to have been in breach of the Corporations Act and to have been carrying on an unlicensed financial services business.
The regulator’s submissions are part of its civil action against the two organisations and follow Federal Court judge Richard White’s April ruling that Gold Coast businessman Craig Gore and other individuals involved with ActiveSuper and Royale Capital either knowingly or unknowingly contravened sections of the Corporations Act.
ASIC’s investigation, which began in November 2011, centred on the misuse of over $4 million raised from SMSF investors. The scheme involved the provision of advice regarding the establishment of SMSFs to invest money in the shares of overseas companies and properties.
“We will not tolerate behaviour that puts at risk the interests of SMSF members, including unlicensed conduct and false and misleading activity,” ASIC commissioner Greg Tanzer said.
He singled out Gore’s behaviour as the most serious.
“ASIC submitted that Mr Gore’s conduct was the most egregious. In his judgment delivered on 14 April 2015, Justice White found that Mr Gore’s purpose in establishing a share scheme offshore was to avoid compliance with the Australian regulatory regime,” Tanzer said.
He said ASIC would act to ensure anyone who deliberately deceived investors or misused their money for a personal benefit was brought to account.
“The experience of the investors in this matter, who have lost in the order of $4.5 million, should also serve as a timely reminder to SMSF investors to understand the risks associated with do-it-yourself super and their obligations as trustees,” he warned.
“Investors need to do their homework, check who they are dealing with and remember SMSFs do not have access to compensation arrangements in the event of theft or fraud.
“There can also be significant tax penalties for those trustees of SMSFs who get it wrong.”
The regulator is seeking permanent bans on Craig Gore, Marina Gore and Jeffery George from providing financial services.
It has also applied for 10-year bans from providing financial services for Mark Adamson and Jason Burrows, as well as a 10-year disqualification from managing companies for Burrows.
The corporate watchdog is also seeking for Justin Gibson a 7.5 year ban from providing financial services or from managing companies.
Justice White reserved his decision on the orders above on 8 May.
