ASIC moves on property promoters

TheAustralian Securities and Investments Commissionhas moved in on property investment seminar promoters, obtaining undertakings from Henry Kaye, Alan Meagher, National Investment Institute Pty Ltd (NII) and Novasource Consulting Pty Ltd in Melbourne’s Federal Court.

Kaye and NII are involved in running investment training courses, which purport to teach people various methods for increasing their wealth through property, and also promote mezzanine finance products.

The courses cost between $4000 and $55,000 to attend, but none of the parties involved hold an Australian Financial Services Licence (AFSL) to give financial product advice as required by ASIC.

According to the undertakings, the parties will no longer be able to conduct seminars as they have in the past, and must obtain an AFSL if they wish to give financial product advice in the future.

Kaye, NII and Novasource have also provided an enforceable undertaking to ASIC in relation to corrective advertising, payment of compensation and ongoing monitoring of the parties’ compliance with these undertakings.

ASIC executive director of financial services regulation Ian Johnston says, “ASIC’s action and these undertakings send a clear message to promoters of property investment seminars that, should they cross the line into giving financial product advice, they must be appropriately licensed or face enforcement action from ASIC.”

Johnston says consistent regulation of property investment advice by responsible state bodies would assist in protecting investors, and that ASIC will release a report into wealth creation seminars including those on property investment in the next month.