Unlicensed adviser disqualified by Fed Court
The Federal Court has decided to permanently restrain unlicensed financial adviser, Monica Kaur, from managing a financial business after it was found she operated an unregistered managed investment scheme (MIS).
Kaur and her husband, Sadu Singh, who were both directors of the scheme under MKS Property Investments/Developments Pty Ltd, were found to have persuaded approximately 300 investors to set up self-managed super funds (SMSFs) between 2017 and 2020, which were then used to invest in property investments set up by MKS Property.
The Court said Kaur and MKS Property ran an unregistered MIS without the required licence or registration, and that Singh also failed in his duties as a director of the scheme for not “exercising his powers and discharging those duties with the degree of care and diligence that a reasonable person would exercise”.
“ASIC is actively engaging with industry and consumer advocacy groups to raise awareness about the risks associated with unlicensed advisers and providing guidance on identifying legitimate financial professionals,” Australian Securities and Investments Commission (ASIC) Executive Director Financial Services Enforcement, Tim Mullaly, said.
“ASIC is committed to safeguarding the interests of consumers and upholding the integrity of the financial services sector, sending a clear message that unlicensed practices will not be tolerated.”
As a result, Kaur has been “disqualified from managing corporations for life… [and] permanently restrained from carrying on a financial services business in Australia and operating an unregistered managed investment scheme” by the Court. Singh has also been disqualified for 15 years.
“The venture into which Ms Kaur directed investor funds was risky and speculative as is shown by the likelihood that most if not all of the funds of many of the investors have been lost,” Justice Jackson said.
“Inadequate record keeping and a lack of controls over what was done with the funds are likely to exacerbate the losses and the difficulty of making any recovery on behalf of investors. The losses are going to be in the millions of dollars and are likely to impact on the retirement savings of many individuals.”
The Court ordered MKS Property to be wound up, with David Hodgson and Andrew Hewitt of Grant Thornton were appointed as receivers of Kaur, Singh and the scheme’s property, as well as liquidators of the scheme and MKS Property.
Accountants, union super sales & call centre staff, and content publishers can already give harmful unlicensed advice with impunity. If Levy has her way, sales and call centre staff from other financial institutions will be able to as well.
Seems like Monica & Sadu chose the wrong structure if they wanted to get away with harmful unlicensed advice.
“ASIC is actively engaging with industry and consumer advocacy groups to raise awareness about the risks associated with unlicensed advisers and providing guidance on identifying legitimate financial professionals,”
What absolute garbage. ASIC and so called “consumer groups” actively vilify licensed financial advisers, and encourage consumers to look elsewhere. It’s no wonder so many consumers get duped by dodgy unlicensed advice.