Margin lending used in alleged fraud
Two men who allegedly enticed people to enter into margin loan arrangements have been committed to stand trial in the NSW District Court following an investigation by the Australian Securities and Investments Commission (ASIC) into a scheme which ended up costing Macquarie Bank around $4.5 million.
The ASIC investigation involved two companies — Progressive Investment Securities Pty Ltd and Capital Investments Group Pty Ltd.
One of the men, Tunde Doja of Sydney, was committed to stand trial on fraud charges while Manouchehr (Mark) Tivay of Seven Hills, Sydney, was committed to stand trial on charges of unlawfully providing a financial service and inducing persons to deal in securities.
It is alleged that Doja unlawfully provided financial services to a number of investors who were enticed into investing in securities known as OEB 1, ORB 2, and OMIP 15-7 through the use of Macquarie Bank Margin Lending. The investors were required to enter into agreements with Macquarie Bank for up to $300,000 in margin loans on each product.
ASIC said many of the loans were now in default and that in October, 2005, Macquarie Bank had estimated its losses to be approximately $4.5 million.
The regulator said that it was being alleged that in many instances the application forms for the margin loan facilities and interest prepayments were either fabricated or submitted without investors’ knowledge.
AUTHOR
Mike Taylor
Recommended for you
AZ NGA’s CEO has unpacked how its recent $345 million debt facility from Barings will accelerate its advice network’s growth ambitions, and allow its largest firms to access a greater source of funding.
Research by Colonial First State has found women are reluctant to make retirement preparations, despite 62 per cent saying they feel that they are unable to achieve a comfortable retirement.
Managed accounts saw net inflows of $14.3 billion in the six months to 31 December, according to the latest IMAP FUM census.
The increased bids for Insignia from Bain and CC Capital value the company at $3.3 billion, while there is still a possibility for competing bids from rival players such as Brookfield.
