‘Like pigs to slaughter’: ASIC to shut down almost 100 scam websites
ASIC has been granted court permission to shut down almost 100 websites running investment scams, with the Federal Court describing how victims were being “fattened like pigs to slaughter”.
Permission was granted for 95 companies to be wound up on just and equitable grounds after ASIC found they had been incorporated with false information and there was a “justifiable lack of confidence” in their conduct and management.
Many of the companies were also associated with websites and apps, which ASIC believed may have been involved in facilitating suspected scam activity by tricking consumers into making investments in phoney foreign exchange, digital assets or commodities trading.
In particular, a Sha Zhu Pan pig butchering scam is being conducted via transnational organised crime groups in South-East Asia.
At the time of the hearing, nearly 1,500 claims by “investors” had been received by the provisional liquidators amounting to total claims of $35,881,288. It is unclear whether that figure represents only the principal amounts invested, or whether it includes the claimed profits.
On the other hand, only two of the 95 companies were found to hold “meaningful assets”, the Federal Court said, and none appeared to be trading.
In a judgment, Justice Angus Stewart described how the scammers made contact with victims on social media then built a friendship – either friendly or romantic – before introducing the idea of creating a trading account. The perpetrators then manipulated the accounts to show the appearance of substantial profits which encouraged the individuals to invest larger sums.
“Ultimately, when an attempt is made to withdraw funds, the victims are unable to do so and never recover their invested funds or any profits from the purported trading. Thus, the victims are fattened like pigs for slaughter,” he concluded.
ASIC deputy chair, Sarah Court, said: “ASIC believes many of these companies were set up with the aim of providing a veneer of credibility by purporting to provide genuine services. This action has shut these companies down and protects consumers from entities with no proper management or control, including some that were associated with potentially fraudulent activity.
“However, these scams are like hydras: you shut down one and two more take its place.”
Catherine Conneely and Thomas Birch of Cor Cordis have been appointed by the court as joint liquidators of the 95 companies.
AUTHOR
Laura Dew
Recommended for you
ASIC has cancelled the AFSL of an advice firm associated with Shield and First Guardian collapses, and permanently banned its responsible manager.
In the run-up to heavy losses expected at the end of the financial year, June has already reported consecutive weeks of adviser losses.
ASIC has banned a former NSW adviser from providing advice for 10 years for investing at least $14.8 million into a cryptocurrency-based scam.
ASIC has sent warning notices to social media finfluencers who it suspects are providing unlicensed financial advice to Australians as part of a global crackdown by international regulators.
