The Australian Securities and Investments Commission (ASIC) has moved successfully in the Federal Court to close down the operations of a company it alleged was providing misleading advice to consumers about rolling over their superannuation entitlements into self-managed superannuation funds (SMSFs).
The Federal Court move represents one of the first prosecutions flowing from ASIC’s scrutiny of the new choice of superannuation fund environment.
The regulator announced that it had obtained orders restraining Steve Preston (formerly known as Gordon Charles Fowler) and Manito, trading as Superannuation Retrieval Services (SRS) from carrying on a business relating to superannuation services. The Federal Court action resulted from ASIC’s so-called “switching campaign” which was aimed at ensuring advisers fulfilled their obligations to provide advice concerning a client’s existing superannuation fund and any new fund that might be recommended.
ASIC alleged in the Federal Court that that Preston and SRS were conducting a financial services business without having an Australian Financial Services Licence (AFSL) and providing misleading advice to consumers about rolling over their superannuation entitlements into an SMSF.
Preston consented to declarations that he had carried on a financial services business without holding an AFSL and to an order restraining him from carrying on a business relating to superannuation interests without holding an AFSL.
The Federal Court ordered Preston and SRS to pay the clients or their respective superannuation funds all funds received which were redeemed but not paid to the clients or their SMSF.
The Court also authorised ASIC to send out a notice to the 34 known clients asking them to list their superannuation interests and list any amounts that still remain unpaid.
