ASIC seeks to enforce undertaking
The Australian Securities and Investments Commission (ASIC) has started proceedings in the NSW Supreme Court against Empower Invest and Newcastle Palais Holdings for breaches of an enforceable undertaking.
Following ASIC’s investigation, the court declared on May 2008 that the companies and their respective directors, Kenneth Watson and Brien Cornwell, had operated a managed investment scheme in relation to a property development in Newcastle without a registration or an Australian financial services licence.
The regulator then accepted enforceable undertakings from the defendants in which they agreed to inform investors in the scheme of the regulator’s concerns, and refund money to any investor who accepted the offer.
The defendants were also obliged to report to ASIC any refunds that were requested and paid to investors.
While Watson and Cornwell complied in part with their undertaking, they failed to repay investors as promised.
The scheme raised $769,500 in total from ten investors, and ASIC’s investigation revealed that offers had been made to other investors to join the scheme.
The matter is expected back before the NSW Supreme Court on Thursday, 22 July.
AUTHOR
Milana Pokrajac
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