Troubled Melbourne financial advice firm United Global Capital (UGC) has been put into liquidation by the Federal Court.
ASIC said that creditors had resolved to wind up UGC, and David Stimpson of SV Partners has been appointed as a liquidator.
UGC withdrew its application regarding the cancellation of its Australian financial services licence, which was cancelled on 31 July – the Administrative Appeals Tribunal (AAT) dismissed that application.
An application made by director Joel James Hewish regarding his 10-year ban is being reviewed by the AAT. Hewish was banned for 10 years from providing financial services, performing any function involved in carrying on of a financial services business, and controlling an entity that carries on a financial services business.
Hewish became a director of UGC on 8 November 2011 and had been the key person on the licence since 18 August 2017.
ASIC found that UGC’s authorised representatives contacted prospective clients and recommended they establish a self-managed superannuation fund (SMSF), rollover their existing superannuation into the SMSF, and invest it in highly speculative investments related to Hewish.
The move follows an earlier announcement on 5 July that UGC had entered voluntary administration. Prior to this, on 20 June, ASIC had obtained interim orders from the Federal Court which froze the assets of UGC and related property investment company Global Capital Property Fund.
ASIC’s investigation into the conduct of UGC, Hewish and related entities is continuing.
Earlier this month, Money Management wrote how the Australian Financial Complaints Authority (AFCA) is considering whether complaints against UGC, which it describes as a financial advice licensee, will be covered by the Compensation Scheme of Last Resort.
Although UGC’s licence is cancelled, ASIC has specified the licence still has effect for limited purposes, including that UGC continues to be an AFCA member until May 2025.
Last year, NextGen was put into liquidation after failing to pay compensation to an individual who was determined by AFCA to have received inappropriate advice.
NextGen was ordered by the Federal Court to pay some $270,000 over the unpaid AFCA determination but failed to to do so. As a result, the plaintiff argued for NextGen to be wound up; a liquidator was appointed in November 2023.
Another horrible example of very few greedy, selfish and stupid people making the rest of the advice industry look bad. A 10-year ban for Joel Hewish should come with a jail term. The same applies to the people behind NextGen. Until the message is absolutely clear to these white-collar criminals that stealing money is not OK, this will not stop. And we all need to work together to make it stop.