Unlicensed MIS operator hit with $1.25m personal penalty

Mike Taylor

Managing Editor and Publisher

28 November 2024

In what represents a first, a man who ran an unlicensed managed investment scheme (MIS) has been found guilty by the Federal Court and been ordered to pay $1.25 million and disqualified for four years under proceedings brought by the Australian Securities and Investments Commission (ASIC).

ASIC announced that the man, Sasha Hopkins, and the A Team Property Group were operating unregistered managed investment schemes in contravention of the Corporations Act and carrying on a financial services business without holding an Australian Financial Services License (AFSL).

The Court ordered that the A Team Property Group, five of the investment schemes and associated companies be wound up and that receives be appointed over the property of the schemes and related trusts associated with the schemnes.

The ASIC announcement said that Hopkins and The A Team Property Group promoted joint venture property developments on social media, such as Facebook, and offered fixed returns of 25% to 50% to be paid between 12 to 26 months.

“Many investors were referred to third parties to establish self-managed superannuation funds in order to invest in the schemes. The Court found that many of the 217 investors in the schemes were inexperienced in investing and believed that the funds they had invested were secure and, that returns would be significant. The investor losses totalled approximately $27 million.”

ASIC noted this was the first time a court has ordered a pecuniary penalty against an individual for a contravention of section 601ED.  It is also the third highest civil penalty ordered against an individual in relation to a proceeding commenced by ASIC.

Commenting on the outcome, ASIC Deputy Chair Sarah Court said,”ASIC recently announced unscrupulous property investment schemes as a key enforcement priority. ASIC is concerned about consumers being enticed to invest in high-risk property development schemes, particularly where they are advised to set up self-managed superannuation funds to make the investment.

“Mr Hopkins and the A Team Property Group failed to hold a financial services licence and operated 11unregistered managed investment schemes. This ultimately resulted in very significant losses for investors.’

Mr Hopkins was also ordered to pay $50,000 of ASIC’s costs.

In handing down his judgment, Justice Beach found that ‘Mr Hopkins had a central role as the founder, designer and operator of the unregistered schemes, including advising individuals to invest their personal savings by setting up a SMSF to invest in a scheme’.