The Australian Securities and Investments Commission (ASIC) has obtained urgent Federal Court orders to preserve funds held by a Queensland company operating as a mutual fund when it is not licensed to do so.
The orders were obtained on 16 September against City Index Australasia Pty Ltd and its director, Blair Jason Travers, to restrain the company and Travers from receiving or disposing of any funds in connection with City Index Australian Mutual Fund, a financial product offered on the company’s website.
City Index Australasia claimed it would offer clients the opportunity to invest in its financial products and maintained that returns would be generated through investments in contracts for difference, spread betting and foreign exchange markets.
Neither City Index Australasia nor Mr Travers held an Australian Financial Services (AFS) licence, the required licence to offer financial products in Australia.
ASIC became aware of the company’s activities after a complaint from City Index Australia Pty Ltd, an AFS licence holder, which confirmed that it has no association or affiliation with City Index Australasia.
ASIC discovered that investor funds had been mistakenly deposited with City Index Australasia in the belief they were to be invested with the legitimate AFS licensee, City Index Australia.
The court orders obtained by ASIC also prevent City Index Australasia and Travers from disposing of, destroying, amending, altering or parting with possession of the company books and records relating to the mutual fund. The orders further prevent Travers or his company taking or sending any money or financial products out of Australia. The orders remain in force until the matter returns to court tomorrow, 23 September 2011.
