ASIC hands down permanent ban

TheAustralian Securities and Investments Commission(ASIC) has permanently banned Robert Huston Reynolds from acting as a representative of a securities dealer or an investment adviser.

ASIC issued the ban after Reynolds was convicted on 43 counts of theft, and one count of defrauding the Commonwealth.

Reynolds has also been sentenced to two years and eight months jail, to serve twelve months, as a result of the conviction.

In 1998, ASIC determined that Reynolds had not acted efficiently, honestly and fairly in his handling of client funds entrusted to him, and banned him from acting as a representative of a dealer or an investment adviser for a period of 10 years.

As a result of this most recent conviction, Reynolds has now been permanently banned from the industry.

In other recent enforcement action, the Supreme Court of Queensland made orders appointing a liquidator to two companies and an unregistered managed investment scheme that took approximately $3.5 million from 161 investors.

ASIC applied for the orders to wind up Groundhog Developments, Enterprise Management Systems Australia (EMS), and The Groundhog Scheme, after discovering that neither Groundhog Developments nor EMS were licensed to give investment advice or conduct a securities business.

In 2001, Groundhog sought money from Australians to be used as ‘loan funds’ for a US company called ISH Holdings, whose primary activity was seemingly to purchase tax default properties in the American marketplace. ASIC enquiries found there was no such company incorporated in the US.

The scheme’s 161 investors were promised extraordinarily high returns of 10 per cent per month, and were recruited into the scheme through ‘financial educational seminars’. Their money was subsequently transferred into a number of offshore bank accounts.