Cancelled AFS licence of Prospero Markets – October 2, 2024
The Australian financial services (AFS) licence has been cancelled for the over-the-counter derivatives issuer Prospero Markets Pty Ltd (in liquidation).
The license was suspended in December 2023 after the issuer failed to lodge its 2023 audited financial accounts. ASIC then appealed to the Federal Court to wind up the company on just and equitable grounds, and its request was granted in April 2024.
ASIC has also ordered that Prospero must continue to be a member of Australian Financial Complaints Authority until March 25, 2026, and to continue to have in place arrangements for compensating retail clients including the holding of a professional indemnity insurance cover. It must also continue to comply with the ASIC Client Money Reporting Rules 2017.
Accountant charged with making false statements – October 1, 2024
Wayne Thomas Fraser, an accountant and tax agent from Dural NSW and director of Maxum Enterprises Pty Ltd, has been charged for allegedly making or authorising false or misleading documents to be filed with ASIC.
Fraser allegedly lodged (or caused these to be lodged) false or misleading forms relating to:
- Embrace Australia Pty Ltd – five forms;
- Situbusit Pty Ltd – five forms; and
- Maiorana Marketing Pty Ltd – six forms.
The documents were related to the appointment and resignation of directors, notifications of resolutions, reports on company activities and property, minutes of meetings, and information on company affairs sent to creditors.
DDO stop order against Indy-C-Fashion Accessories – October 1, 2024
An interim stop order has been made out on Indy-C-Fashion Accessories Pty Ltd to prevent vulnerable consumers from entering into credit arrangements to pay for goods on credit.
ASIC is concerned about consumers at risk of financial hardship entering into credit arrangements with a company that does not assess consumers’ needs, objectives or financial capacity before offering the loan.
The interim stop order is valid for 21 days unless revoked earlier.
Director Doble disqualified five years – September 30, 2024
Graeme John Doble has been disqualified five years from managing corporations as a result of his involvement in six failed companies.
Between May 1984 and August 2023, Doble was a director of Zentry Pty Ltd, Seville Optimised Solutions Pty Ltd, Christina Administration Pty Ltd, Doble Express Transport Pty Ltd, DXT (NSW) Pty limited, and Green Gables Cootamundra Pty Ltd.
Doble was found to have failed to meet his obligations as director by:
- improperly gaining advantage for himself or others relating to Doble Express Transport, Seville Optimised Solutions and Zentry – which caused detriment to the companies;
- being involved in a tax avoidance scheme to benefit his family business;
- allowing DXT NSW and Zentry operate while being insolvent;
- failing to ensure that Doble Express Transport and Seville Optimised Solutions lodged income tax returns;
- causing or allowing four of the companies to incur debts to the Australian Taxation Office (ATO), Revenue NSW in addition to having outstanding unpaid workers compensation premiums;
- failing to make out and submit a Report on Company Activities and Property, and failing to deliver books and records to the liquidator of Seville Optimised Solutions; and
- failing to ensure that Zentry kept adequate books and records.
At the time of ASIC’s decision, the six companies owed a combined total of A$15,170,970 ($10,509,358) to unsecured creditors, of which A$8,041,582.90 ($5,571,151) was owed to the ATO, A$580,938.25 ($402,470) to Revenue NSW and A$773,567.14 ($535,850) was outstanding in unpaid workers compensation premiums.
Court updates
Liquidators to Global Capital Property Fund – October 4, 2024
The property investment company Global Capital Property Fund Limited (GCPF) has been ordered by the Federal Court to be wound up on just and equitable grounds, and two liquidators have been appointed. ASIC earlier applied to wind up GCPF due to ‘numerous concerns’ about the management of its business.
Interim stop orders were also earlier made in July – September 2022 to prevent the offer of shares to retail investors under GCPF’s prospectus, and the issue of shares due to a deficient target market determination.
Charges dismissed against former Macquarie adviser – October 4, 2024
All charges against former Macquarie financial adviser Warren Scott Acworth have been dismissed by the Brisbane Magistrate’s Court. He was earlier charged with 27 offences, including:
- 16 counts of making false or misleading statements;
- 6 counts of making a statement that was false contrary; and
- 5 counts of fraud.
ISG Financial to wind up registered managed investment schemes – October 3, 2024
Three receivers have been appointed by the Queensland Supreme Court to wind up the two schemes. The ISG Private Access Fund and the ISG Real Estate Equity Fund were both owned by A.C.N. 114 733 569 Limited (formerly ISG Financial Services Limited).
ISG and its sole director, Benjamin Godfrey, had earlier applied to appoint receivers to the schemes, yet ASIC intervened in the proceedings as a result of concerns about factors such as ISG’s financial, governance and compliance positions. Other investors had also intervened also putting forward receivers other than those proposed by Godfrey and ISG.
The receivers will, amongst other matters, investigate any claims made on behalf the schemes’ members, as well as possible claims by investors or any other creditors.
Dismiss of ANZ appeal against ASIC – October 2, 2024
The Full Federal Court has dismissed Australia and New Zealand Banking Group Limited’s (ANZ) appeal that it breached continuous disclosure laws when undertaking an A$2.5 billion ($1.6 billion) institutional share placement in 2015 and did not disclose material placement subscriptions allocated to underwriters. The share placement had bought nearly a third of the shares, worth between A$754m and A$791m ($476m-$499m).
With the decision, the Court upheld the penalty of A$900,000 ($620,548) inmposed on ANZ for contravening continuous disclosure laws.
ANZ was also ordered to pay ASIC’s court costs.
ASIC news week 40
Update on action against SMSF auditors
During the first half of 2024, ASIC took action against a total of 13 approved self-managed superannuation fund (SMSF) auditors – which were all referred to the Commission by the Australian Taxation Office.
The concerns included areas such as breaches of auditing and assurance standards, independence requirements, continuing professional development obligations, or for not being a fit and proper SMSF auditor, and resulted in:
- seven disqualified;
- one suspended;
- additional conditions on four; and
- one gotten the SMSF registration cancelled.
Names and additional information can be found here.
This announcement is in addition to the action against 15 SMSF auditors that was reported in March.
Updated guidance for the carbon market
Regulatory Guide 236 Do I need an AFS licence to participate in carbon markets? has been updated to assist participants in carbon markets to determine whether they need an AFS licence to engage in certain activities. The updates reflect:
- the safeguard mechanism reforms that commenced on July 1, 2023; and
- the changes to the Australian Carbon Credit Unit Scheme that have occurred since RG 236 was last re-issued in May 2015.
An update to Information Sheet 156 Regulated emissions units: Applying for or varying an AFS licence is expected to be published later this year.
Updated regulatory guidance for registered liquidators
The regulatory guidance from 2017 for those who are or wish to become registered liquidators has now been updated.
The changes reflect:
- reforms to the corporate insolvency legislative framework in 2021;
- ASIC’s experience from administering the regime;
- separate guidance on different registrations applications;
- various Administrative Appeals Tribunal decisions; and
- industry feedback.
For all updates in Regulatory Guide 258 Registered liquidators: Registration, ongoing obligations, disciplinary actions and insurance requirements see here.
Extended relief for employee redundancy funds
The relief to grant operators and promoters of employee redundancy funds from the AFS licensing and managed investment provisions of the Corporations Act has been extended for 18 months.
ASIC earlier consulted to remake the relief under ASIC Corporations (Employee redundancy funds relief) Instrument 2015/1150 and to extend it for five years, as it was due to expire October 1.
After mixed reviews, the Commission decided to add an interim extension period to allow for time to further consult on the topic.
The transitional relief is provided under ASIC Corporations (Amendment) Instrument 2024/618, and entities that rely on the relief will have to notify the Commission of this by October 31, 2024.
