The director of a property development company that promoted the use of SMSFs for investments has been ordered to pay $1.25 million for operating unregistered managed investment schemes, while the firm and its related activities have been ordered to close.
The Federal Court made the ruling against Sasha Hopkins on 27 November after finding he and The A Team Property Group (TATPG) ran the unregistered schemes in contravention of section 601ED of the Corporations Act and carried on a financial services business without an Australian financial services licence in contravention of section 911A.
As a result of these actions, the court ordered TATPG, five investment schemes and associated companies be wound up and receivers appointed over the property of the schemes and related trusts associated with the schemes.
The Australian Securities and Investments Commission (ASIC), which brought the case to court, stated Hopkins and TATPG promoted joint venture property developments on social media offering returns of 25 per cent to 50 per cent within 12 to 26 months and many investors were referred to third parties to establish an SMSF to invest.
“The court found that many of the 217 investors in the schemes were inexperienced in investing and believed that the funds they had invested were secure and that returns would be significant. The investor losses totalled approximately $27 million,” the regulator added.
ASIC deputy chair Sarah Court said: “We recently announced unscrupulous property investment schemes as a key enforcement priority. ASIC is concerned about consumers being enticed to invest in high-risk property development schemes, particularly where they are advised to set up SMSFs to make the investment.
“Mr Hopkins and The A Team Property Group failed to hold a financial services licence and operated 11 unregistered managed investment schemes. This ultimately resulted in very significant losses for investors.”
ASIC added Hopkins was ordered to pay $50,000 of the regulator’s costs and was also disqualified for four years, while the fine he received was the third highest civil penalty against an individual due to proceedings started by the regulator and was the first court-ordered penalty against an individual for a contravention of section 601ED.
The court ruling follows ASIC obtaining interim orders in June 2022 to freeze the assets of Hopkins and TATPG and the commencement of the civil action in July 2023.
