ASIC out to punish unregistered fundies
The Australian Securities and Investments Commission (ASIC) is seeking penalties against the unlicensed operators of more than 12 offshore managed investment funds, which were found to comprise a single unregistered managed investment scheme.
More than $50 million was invested in the funds, which targeted Australian investors and self-managed superannuation funds. The funds consisted of 14 individual investment funds in countries including New Zealand, the United States, Hong Kong, Vanuatu, the Bahamas, Anguilla, and the Turks and Caicos Islands.
Late last month, the Supreme Court of New South Wales found that David Hobbs of New Zealand either 'personally chose' or 'implicitly approved' of each of the individual scheme administrators including David Collard, Min Hua, Hui Min Wu, Brian Wood, Jimmy Truong, Con Koutsoukos and Jacqueline Hobbs.
With the court finding him to be the 'mastermind' behind the scheme, Hobbs made the selections despite "knowing these individuals were not sophisticated financial advisers and that most of the other scheme administrators also lacked financial sophistication or expertise", the regulator stated.
According to the Court, there was also substantial evidence of improper payments from the fund, including ponzi payments, the payment of Hobbs' private expenses, and payments to his family as well as to some scheme operators.
The penalty hearing will be heard on 14 and 21 December.
The regulator first began an investigation into unregistered offshore fund operators targeting Australian investors and SMSFs in 2007, and between 2007 and 2008 froze eight offshore trading accounts, securing the payment into court of $20 million.
ASIC first took court action against the operators of the Hobbs scheme in April 2010.
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