Court decision allows investors to pursue proceedings against MFL
A judgement by the Federal Court will make it easier for clients of the Melbourne-based company, Money for Living (MFL), to seek legal advice after an announcement last week that the company had been placed in the hands of administrators.
The Australian Securities and Investments Commission’s (ASIC) application to the Court was sought in order to assist the purchasers of products offered by MFL and MFL Property Holdings (MFLPH) to pursue class actions or other proceedings against the company and its directors, Stephen O’Neill, Gary O’Neill and Jolanta Olszewski.
The court found that MFL was a financial product and the company had made false and misleading statements on their website and in the agreements that had been drawn up with vendors.
“The clarification of the legal position will assist elderly people who purchased MFL’s products in pursuing action against the companies and its directors,” Jan Redfern, executive director of enforcement at ASIC said.
MFL offered to buy homes but then allowed the former owners a ‘guaranteed lifetime tenancy’ in the property.
Consumers received the purchase price of the property in a lump sum payment, instalments or a combination of both.
In October last year, ASIC started investigating MFL alleging the company had made false and misleading representations in various agreements and materials, including in communications to 117 vendors who sold their homes.
MFL and MFLPH were placed into voluntary administration in September last year and criminal proceedings have also begun against directors Gary and Stephen O’Neill.
Stephen O’Neill is charged with four counts of obtaining financial advantage by deception, four counts of dishonest use of position as an officer of a corporation and two counts of managing a corporation while disqualified.
Gary O’Neill has been charged with four counts of obtaining financial advantage by deception and seven counts of dishonestly using his position as a director of a corporation.
ASIC alleges that Stephen and Gary O’Neill obtained mortgages from a financier totalling almost $1 million, by submitting loan applications that failed to disclose the life tenancies attached to the mortgaged properties.
Bail for the O’Neills has been extended and the matter is listed for a committal hearing in March, 2007.
AUTHOR
Recommended for you
As the government announces a public inquiry into the collapse of Dixon Advisory, risk adviser Richard Silberman has detailed the three areas that typically lead to an AFSL's collapse.
With a growing number of advisers now running their own business, they need to pivot their career identity to being a business owner rather than just as a financial adviser if they want to futureproof their business.
Zenith Investment Partners has launched a range of new managed account portfolios over the past quarter, including on Insignia Financial’s Expand platform.
The financial services technology firm has officially launched its digital advice and education solution for superannuation funds and other industry players.
