Margin lending used in alleged fraud
Two men who allegedly enticed people to enter into margin loan arrangements have been committed to stand trial in the NSW District Court following an investigation by the Australian Securities and Investments Commission (ASIC) into a scheme which ended up costing Macquarie Bank around $4.5 million.
The ASIC investigation involved two companies — Progressive Investment Securities Pty Ltd and Capital Investments Group Pty Ltd.
One of the men, Tunde Doja of Sydney, was committed to stand trial on fraud charges while Manouchehr (Mark) Tivay of Seven Hills, Sydney, was committed to stand trial on charges of unlawfully providing a financial service and inducing persons to deal in securities.
It is alleged that Doja unlawfully provided financial services to a number of investors who were enticed into investing in securities known as OEB 1, ORB 2, and OMIP 15-7 through the use of Macquarie Bank Margin Lending. The investors were required to enter into agreements with Macquarie Bank for up to $300,000 in margin loans on each product.
ASIC said many of the loans were now in default and that in October, 2005, Macquarie Bank had estimated its losses to be approximately $4.5 million.
The regulator said that it was being alleged that in many instances the application forms for the margin loan facilities and interest prepayments were either fabricated or submitted without investors’ knowledge.
AUTHOR
Mike Taylor
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