Powered by MOMENTUM MEDIA
moneymanagement logo
 
 

ASIC appoints liquidator to solicitors mortgage schemes

compliance/mortgage/investors/investments-commission/

12 June 2002
| By Kate Kachor |

TheAustralian Securities and Investments Commission (ASIC)has continued its crackdown on dishonest investment schemes, after successfully lodging wind up orders with the Queensland Supreme Court against solicitors mortgage schemes operated by Bells Securities (Bells).

Bells had previously applied to the Queensland Supreme Court to have itself appointed to wind up the scheme under the supervision of Hall Chadwick and with the assistance of Steindl Bell. However, ASIC intervened and opposed the application, seeking the appointment of independent liquidators Gregory Maloney and Peter Geroff, of Ferrier Hodgson.

According to ASIC’s Court application, the regulator has a number of concerns associated with Bells appointing itself as liquidator, including the potential for a conflict of interest to arise if Bells was appointed.

The conduct of the scheme to date, including the delay in winding up, the possible shortfall in funds owing to investors, and the information disclosed by Bells to investors in the scheme when seeking their support to have Bells appointed to wind up the scheme, were also among ASIC’s concerns.

The presiding judge, Justice Wilson, says there is a real possibility of the investors having recourse against Bells and this gives rise to a potential for conflict between Bells’ duty to the investors and its own interests.

While Justice Wilson noted Bells’ application had the support of a majority of the investors, he says there is a significant public interest in ensuring the transparency of the winding up process and the safeguarding of the rights of the investors.

Justice Wilson says there is good reason to be concerned, claiming the investors may not be fully aware of all the circumstances surrounding the making and management of the four remaining loans, and that if Bells' application was approved, these investors might never appreciate the full extent of their rights.

Solicitors mortgage schemes were required to have been wound up or otherwise brought into compliance with the Managed Investments Act before February 28, 2002.

Bells is a trustee company used by the partners of Bells Solicitors in Benowa, a company which later became the law firm Steindl Bells.

Read more about:

AUTHOR

Recommended for you

sub-bgsidebar subscription

Never miss the latest news and developments in wealth management industry

MARKET INSIGHTS

The succession dilemma is more than just a matter of commitments.This isn’t simply about younger vs. older advisers. It’...

1 day 8 hours ago

Significant ethical issues there. If a relationship is in the process of breaking down then both parties are likely to b...

3 weeks 5 days ago

It's not licensees not putting them on, it's small businesses (that are licensed) that cannot afford to put them on. The...

1 month ago

After last month’s surprise hold, the Reserve Bank of Australia has announced its latest interest rate decision....

4 weeks ago

ASIC has released the results of the latest adviser exam, with August’s pass mark improving on the sitting from a year ago. ...

4 days 2 hours ago

While the profession continues to see consolidation at the top, Adviser Ratings has compared the business models of Insignia and Entireti and how they are shaping the pro...

1 week 5 days ago

TOP PERFORMING FUNDS

ACS FIXED INT - AUSTRALIA/GLOBAL BOND