Ponzi scheme ‘mastermind’ gets record penalty
A New Zealand man who was behind a $30 million Ponzi scheme and more than a dozen unregistered offshore managed funds has been handed a $500,000 penalty by the industry regulator.
The Australian Securities and Investments Commission (ASIC) has also permanently banned David Hobbs from managing corporations and providing financial services.
ASIC's investigation found that Hobbs, along with 12 other people including his wife Jacqueline, operated the unlicensed funds which targeted Australian investors and self-managed super funds.
More than $55 million was invested in 14 individual funds in countries including New Zealand, the United States, Hong Kong, Vanuatu, the Bahamas, Anguilla, and the Turks and Caicos Islands.
The Supreme Court of NSW found in November 2012 that the funds were one large scheme and that Hobbs either ‘personally chose' or ‘implicitly approved' the other individuals who operated the scheme with him.
Earlier this month, three other people involved in the scheme were sentenced to jail after the court found they knew the fund they were operating was a scam and that the ‘salary' they were drawing came from investors' money.
HLB Mann Judd was appointed liquidator and will determine the return of funds to investors.
Jacqueline Hobbs received an eight-year ban from providing financial services and a six-year ban from managing corporations, along with receiving a $20,000 penalty.
David Collard received a $150,000 penalty and a permanent ban from the industry, while Huimin (Nancy) Wu was given an eight-year ban.
ASIC Commissioner Greg Tanzer said the whole scheme was designed to avoid compliance with Australian financial services laws.
Hobbs breached investors' trust and left them in very difficult financial positions, Tanzer added.
"The experience of the investors in this matter should serve as a timely reminder to investors to beware of returns that sound too good to be true," he said.
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