The Federal Court of Australia has judged in favour of the Australian Securities and Investments Commission (ASIC) in proceedings against Gallop International Group (GIG), Gallop Asset Management (GAM), Stumac and former director Ming-Chien Wang.
The proposed civil penalty against Wang would be the highest civil penalty awarded against an individual in an ASIC proceeding.
GIG and GAM both held Australian Financial Services Licences (AFSL) and operated the Gallop business, with investors, predominately from China and Taiwan, who deposited funds into Australian bank accounts to invest in Gallop products.
Between May 2016 and May 2017 over $36 million had been deposited into GIG’s Australian bank account, which was withdrawn and paid into overseas accounts held by GIG, Wang, his family or associates.
Justice Charlesworth had proposed orders and given time to apply to the court about the proposed orders, but if no parties applied they would be effective on 26 September 2019, the orders were:
- Declarations of contraventions of financial services laws by GIG;
- Declarations that Wang knowingly concerned in the contraventions of GIG;
- Permanent injunctions restraining Wang from carrying on a financial services business;
- An order disqualifying Wang from managing a corporation 10 years;
- An order Wang pay a civil penalty of $3 million, and the winding up of GAM and Stumac.
Justice Charlesworth declined to make declarations of contravention sought by ASIC against GAM.
Martin David Lewis of KPMG would be appointed liquidator of GAM, GIG and Stumac.