Former Pegasus director struck off for 30 years

A former director of the Pegasus Leveraged Options Group, Craig John McKim, has been banned from being involved in the management of a company for 30 years.

The lengthy term of the bans comes after an investigation by theAustralian Securities and Investments Commission(ASIC) discovered that Pegasus and McKim were operating a managed investment scheme in breach of the Corporations Act.

ASIC initiated proceedings in the Supreme Court of NSW to ban McKim after it found McKim and Pegasus had engaged in misleading or deceptive conduct in order to entice investors into the scheme.

Approximately $3.7 million from some 90 investors has been traced by ASIC as having been invested in the unregistered schemes.

However, the actual funds taken by the scheme are likely to be far in excess of this amount, according to ASIC.

Evidence presented at the court proceedings showed that cash transfers were made from the scheme to McKim and his relatives.

McKim also lost approximately $2 million through gambling.

McKim claimed investors' money was being held in a bank account in Spain and that efforts were being made to return this money to Australia.

ASIC froze the assets of both McKim and Pegasus in March 2001 after receiving complaints from investors in the scheme.

Orders have been made for the winding up of the scheme and Pegasus.

Pegasus did not have a securities dealer's licence and the scheme did not have a disclosure document for fundraising lodged with ASIC as required under the law.

McKim was managing Pegasus while disqualified from being a director on account of previous criminal convictions.