ASIC, Property

ASIC stops property investment promotion

ASIC property investment

ASIC has placed a stop order on a property investment pitched at SMSFs over concerns its performance figures were misleading or deceptive.

The Australian Securities and Investments Commission (ASIC) has placed an interim stop order on a property investment company to prevent it issuing and transferring interests in a trust due to misleading or deceptive statements in marketing and disclosure material.

ASIC placed the stop order on product disclosure statements (PDS) and advertisements for Melbourne-based Fawkner Property’s Private Property Trust No 20, which offered units in a investment trust to individual and SMSF investors.

The order places a 21-day halt on offering, issuing, selling or transferring interests in Private Property Trust No 20, which was marketed as Essential Services Trust No 20, based on the existing PDS.

ASIC stated it considered Fawkner had misrepresented the performance risks of its fund during its marketing by inadequately explaining how forecast returns had been calculated, not providing an adequate warning that the forecast performance may not be achieved and used the term ‘COVID-proof’.

The corporate watchdog also stated the performance had been misrepresented by inappropriately comparing the fund to lower-risk investments, benchmarks and indices, and using outdated performance numbers.

“ASIC identified the misleading or deceptive statements in advertisements for the [Private Property Trust No 20], including Fawkner’s website and the PDS during a recent surveillance,” the regulator stated on its website.

“The interim stop order against Fawkner is a result of ASIC’s ongoing surveillance to identify the use of misleading performance and risk representations in marketing by managed funds.

“ASIC may consider further regulatory action in relation to the [Private Property Trust No 20] and Fawkner.”

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