Court decision allows investors to pursue proceedings against MFL
A judgement by the Federal Court will make it easier for clients of the Melbourne-based company, Money for Living (MFL), to seek legal advice after an announcement last week that the company had been placed in the hands of administrators.
The Australian Securities and Investments Commission’s (ASIC) application to the Court was sought in order to assist the purchasers of products offered by MFL and MFL Property Holdings (MFLPH) to pursue class actions or other proceedings against the company and its directors, Stephen O’Neill, Gary O’Neill and Jolanta Olszewski.
The court found that MFL was a financial product and the company had made false and misleading statements on their website and in the agreements that had been drawn up with vendors.
“The clarification of the legal position will assist elderly people who purchased MFL’s products in pursuing action against the companies and its directors,” Jan Redfern, executive director of enforcement at ASIC said.
MFL offered to buy homes but then allowed the former owners a ‘guaranteed lifetime tenancy’ in the property.
Consumers received the purchase price of the property in a lump sum payment, instalments or a combination of both.
In October last year, ASIC started investigating MFL alleging the company had made false and misleading representations in various agreements and materials, including in communications to 117 vendors who sold their homes.
MFL and MFLPH were placed into voluntary administration in September last year and criminal proceedings have also begun against directors Gary and Stephen O’Neill.
Stephen O’Neill is charged with four counts of obtaining financial advantage by deception, four counts of dishonest use of position as an officer of a corporation and two counts of managing a corporation while disqualified.
Gary O’Neill has been charged with four counts of obtaining financial advantage by deception and seven counts of dishonestly using his position as a director of a corporation.
ASIC alleges that Stephen and Gary O’Neill obtained mortgages from a financier totalling almost $1 million, by submitting loan applications that failed to disclose the life tenancies attached to the mortgaged properties.
Bail for the O’Neills has been extended and the matter is listed for a committal hearing in March, 2007.
Recommended for you
Digital advice tools are on the rise, but licensees will need to ensure they still meet adviser obligations or potentially risk a class action if clients lose money from a rogue algorithm.
Shaw and Partners has merged with Sydney wealth manager Kennedy Partners Wealth, while Ord Minnett has hired a private wealth adviser from Morgan Stanley.
Australian investors are more confident than their APAC peers in reaching their financial goals and are targeting annual gains of more than 10 per cent, according to Fidelity International.
Zenith Investment Partners has lost its head of portfolio solutions Steven Tang after 17 years with the firm, the latest in a series of senior exits from the research house.
