Wattle appeal thrown out
A Queensland court has thrown out an application by the promoters of the discredited Wattle investment scheme to have the prosecution into the group by the Commonwealth Director of Public Prosecutions (DPP) ruled unconstitutional.
The scheme promoters made the application to the Queensland Court of Appeal, arguing that the charges against them predated the referral of powers from the States to the Commonwealth to prosecute criminal offences under the Corporations Act.
TheAustralian Securities and Investments Commission(ASIC) has alleged that each of the promoters were in contravention of the Corporations Act when they offered investments in the scheme.
The application was filed by Wattle promoters Robert Edward Corbett, Anne Shirley Corbett, Kenneth Edwin Parker, Rodney James MacKay, John Andrew Allen, Robert Murray Cooper and Brian Michael Wood.
But the court rejected the appeal, finding that the provisions of the Corporations Act permitted the prosecution by the Commonwealth DPP of offences which, when allegedly committed, were State offences.
More than 2700 individuals had invested up to $165 million in the Wattle scheme by the time it came to the attention of ASIC in 1998.
Investors were told their funds were on-loaned on a short-term basis to provide returns of up to 50 per cent. However the scheme was actually paying interest and refunds to existing investors in the schemes entirely out of the incoming funds of new investors.
The founder of the Wattle scheme, Geoffrey Robert Dexter, was last year sentenced to 10-years’ jail for his involvement in the affair.
A string of other financial advisers have also come under scrutiny for their involvement with the scheme, including 10 who have been banned from acting as investment advisers for between one and five years.
According to ASIC, the charges against the Wattle scheme promoters will now be re-listed for hearing in the District Court.
Recommended for you
ASIC has released the results of its first adviser exam to be held in 2025, with 241 candidates attempting the test.
Quarterly Wealth Data analysis has uncovered positive improvements in financial adviser numbers compared with losses in the prior corresponding period.
Holding portfolios that are too complex or personalised can be a detractor for acquirers of financial advice firms as they require too much effort to maintain post-acquisition.
As the financial advice profession continues to wait on further DBFO legislation, industry commentators have encouraged advisers to act now in driving practice efficiency.
