Frozen assets of First Guardian Master Fund and David Anderson – February 28, 2025
ASIC has obtained interim orders by the Federal Court to freeze the assets of Falcon Capital Limited, the First Guardian Master Fund and the director David Anderson in order to protect investor funds while an investigation is ongoing.
The orders will restrain Falcon and Anderson from:
- removing their property from Australia;
- any kind of dealing with or diminishing the value of that property;
- incurring new liabilities; and
- dealing with money in bank accounts where Falcon or Anderson have interest.
Frozen assets of Ferras Merhi of Venture Egg and FSGA, and Osama Saad – February 27, 2025
The Federal Court has made interim orders to freeze certain assets of financial adviser Ferras Merhi and Venture Egg Financial Services Pty Ltd (formerly Ferras Merhi Pty Ltd) and Financial Services Group Australia Pty Ltd in connection with investigations of some managed investment schemes, such as the Shield Master Fund.
In a related action, assets have also been frozen for Osama Saad, former director of Aus Super Compare Pty Ltd (in liquidation) and Atlas Marketing Pty Ltd (in liquidation), due to the same concerns and investigation.
All interim orders have been made out until April 4, 2025, when final hearings are scheduled.
Other actions connected to the Shield Master Fund include:
- February 7, 2024: Interim stop orders were made on four product disclosure statements for classes of units of the Shield Master Fund.
- June 19, 2024: Interim orders to freeze the fund have been obtained from the Federal Court to protect investor funds while an investigation is ongoing.
- June 27, 2024: Independent party appointed to verify Shield payments.
- December 3, 2024: From the second creditors’ meeting of Keystone Asset Management Ltd (where both receivers and managers, and administrators were appointed), the administrators thought it would not be in the best interest of creditors, unit holders or underlying investors in Shield for it to be wound up. ASIC was also investigating whether ‘significant’ investor funds could have been dissipated.
JB Markets director Peter Aardoom banned for eight years – February 25, 2025
Peter Aardoom, director of JB Markets, has been banned from providing services, controlling an entity and performing any function within financial services for eight years due to not being a fit and proper person for the industry and is likely to contravene a financial services law.
In 2023, Aardoom was found to have:
- entered in 2021 into a false loan agreement of an A$540,000 (342,867) cash payment between JB Markets and another company – knowing that the payment was for equity in JB Markets and not a loan;
- failed to issue shares to the other company within the required timeframe;
- provided a false loan agreement, and restructuring documents to a restructuring practitioner, creditors and ASIC during the small business restructure process of JB Markets, with the information of the other company being a creditor rather than a shareholder – which was done to enable it to vote in the restructure and diminish voting power of other creditors; and
- dishonestly reduced the purported loan in the restructuring plan to ensure that the total liabilities of JB Markets remained under the A$1m ($634,193) threshold.
Cancelled licenses
Vestiuum CSF Pty Ltd – February 27, 2025
The Australian financial services licence has been suspended for Vestiuum CSF Pty Ltd until August 19, 2025. The suspension (rather than ban) is due to Vestiuum ceasing to carry on financial services since December 2021 – yet it has taken steps to relaunch its business now.
Tracie Lee Hanson and William James Lawrence – February 26, 2025
The Australian credit licences have been cancelled for credit licensees Tracie Lee Hanson and William James Lawrence.
Hanson failed to:
- lodge three annual compliance certificates;
- pay fees – and was therefore expelled from the Australian Financial Complaints Authority; and
- pay industry funding levies to ASIC for three years.
Lawrence failed to pay industry funding levies to ASIC for six years.
Court updates
Allianz and AWP convicted and fined $16.8m – February 28, 2025
Allianz Australia Insurance Limited and AWP Australia Pty Ltd have been convicted in the Supreme Court of NSW for making false or misleading statements, and will pay fines of A$13.5m ($8.4m) and A$3.3m ($2m) respectively.
The misleading statements happened between 2016 and 2018, where both companies misrepresented the characteristics or level of coverage of travel insurance that were available to consumers.
“These breaches were essentially caused by a desire not to expend the necessary monies to ensure proper oversight of that which is published by the company.”
Justice Rothman
Allianz Australia Insurance was sentenced for six counts of disseminating information that was false or misleading, and AWP for one count of disseminating misleading information.
Allianz and AWP will also pay ASIC’s investigation costs.
Former Star executives penalised for breaching duties – February 24, 2025
Gregory Hawkins and Harry Theodore, two former executives of The Star Entertainment Group Ltd, have been penalised by the Federal Court after admitting to have breached their duties.
Gregory Hawkins, Star’s former Chief Casino Officer, was ordered to pay A$180,000 ($114,648), plus was disqualified from managing corporations for 18 months.
Hawkins was found to have violated section 180(1) of the Corporations Act 2001 in 2018 and 2019 by:
- approving an agreement with the gambling outfit Suncity in 2018 even though he knew that the conduct of Suncity’s representatives exposed the company to breaching the law or become unsuitable to hold a casino license;
- failing to report what he knew about Suncity to the Board in 2018, plus additional information in 2019 regarding conduct of players in the private gaming room Salon 95, and information that had been published in media about Suncity and its associates, and the risks Star faced by being connected to it; and
- failing to recommend to the Board that the company should review or terminate its relationship with Suncity and its associates.
Harry Theodore, former Chief Financial Officer, was ordered to pay a A$60,000 ($38,216) fine, and disqualified from managing corporations for nine months. He was also found to have violated section 180(1) by not preventing the company from sending inaccurate, incomplete, and misleading information to National Australia Bank relating to how the China Union Pay cards were used for gambling purposes at the bank’s terminals located within Star’s casino.
The proceedings against the remaining nine former Star directors and officers continue.
ASIC news week 9
New clearing and settlement rules
ASIC has, for the first time, used its new powers under the Competition in Clearing and Settlement in order to promote competition. With the new rules, ASX will now have to ensure that its clearing and settlement services are offered in a transparent, and non-discriminatory way.
“This is about limiting ASX’s ability to misuse its monopoly power to deter new entrants,” said ASIC Chair Joe Longo. “The clear and benchmarked pricing structure is intended to reduce competitive barriers to entry for entities unaffiliated with the ASX.”
Regulatory roadmap for public and private capital markets
ASIC has released the discussion paper Australia’s evolving capital markets. The paper looks at the dynamics between public and private markets, and showcases the Commission’s preliminary views on opportunities and risks stemming from shifts in the markets.
“ASIC is determined to achieve dual goals with this paper by ensuring Australia’s markets are attractive to companies and investors while protecting against risks,” Chair Joe Longo said, calling the paper “one of the most significant initiatives of the year.”
“The critical point for ASIC is whether there is a need for interventions to address risk or adjustment to how regulation operates to take advantage of opportunities important for the attractiveness of our capital markets.”
Feedback on the questions in the paper can be submitted until April 28.
Speech
On February 27, ASIC Chair Joe Longo made an opening statement at the Senate Economics Legislation Committee, 2024-2025 Additional Budget Estimates, where he touched on the new personnel changes within the Commission, as well providing an update on key aspects of its upcoming work.
He referred to the newly published discussion paper, and said that ASIC is “looking to ensure we have the regulatory settings right to maintain the integrity, transparency and efficiency of our capital markets, which is critical to the sound functioning of Australia’s financial system and investor confidence.”
Longo also spoke about its increasing enforcement actions, and said that ASIC’s priorities are “selected to focus our enforcement efforts on the areas of greatest potential financial harm and promoting transparent and reliable markets.”
Enforcement update
ASIC has just released its latest Enforcement and regulatory update, which shows:
- A total of 10,240 scam sites have been removed – an average of 130 a week. Of that total, 7,227 were fake investment platform scams, 1,564 phishing scam hyperlinks, and 1,257 cryptocurrency were investment scams.
- Investigations have increased 31% during the last six months to 109 new investigations, while 15 new court actions were started, and 376 surveillance exercises completed.
- A majority of its civil and criminal prosecutions were successful – resulting in A$46.6m ($29m) in civil penalties, and 13 criminal convictions.
“The changes we have made mean ASIC is able to more efficiently process intelligence, leading to earlier commencement of investigations and surveillances,” ASIC Chair Joe Longo said.
Longo also added that the Commission predicts that the increased number of investigations the authority has started will “flow through to significant compliance, enforcement and consumer outcomes in the year ahead.”
