Investment spruikers catch ASIC eye

A collection of firms and individuals promoting the trading of options with claims of returns of “60 to 180 per cent” and that investors attending seminars would find it “virtually impossible not to make money” have felt the wrath of the Australian Securities and Investments Commission (ASIC).

ASIC has obtained Federal Court restrictive orders against five investment spruikers for either providing advice without an Australian Financial Services Licence (AFSL) or making false and misleading representations that contravene the ASIC Act 2001.

Break Free Events (BFE) director Jon Giannopoulos and CTC Professional Services (CTC) director Carlo Castellano were restricted by the Melbourne court ruling from providing any form of financial service in the future.

The court found Giannopoulos and Castellano had arranged and conducted seminars promoting exchange traded options without either co-defendant holding an AFSL.

The ruling also specifically applies to BFE and CTC, which were listed as co-defendants, as well as to an additional co-defendant, JTC Group.

Giannopoulos, BFE, and the JTC Group - the only co-defendant licensed to provide financial advice - were also found to have made false and misleading representation in contravention of the ASIC Act 2001.

BFE was ordered to publish a corrective advertisement to alert consumers who may have suffered a loss as a result of being misled by its representations.

Key representations considered misleading and deceptive by ASIC were that “returns of 60-180 per cent could easily and consistently be made following a strategy provided by Mr Jon Cox, the director of JTC Group”, along with claims that “by trading options, returns of 150 per cent in five days could be made”.

Another was that by trading options and working less than 10 hours per week, clients could regularly make between $2,500 and $7,000.