Mega trouble for property scheme
The Federal Court has ordered the liquidation of a Central Coast property development scheme after an investigation by the regulator found the operation to be illegal.
The court and action was based on the Australian Securities Investments Commission’s (ASIC) findings that the operators of Mega-Money, trading as Sevelle Financial Services, and its director David Sevelle had attempted to circumvent registration and disclosure requirements under the Corporations Act by operating as an unregistered managed investment scheme.
Between February 2004 and August 2006, ASIC alleged that not only did Sevelle operate an unregistered managed investment scheme, but also carried on a financial services business without holding an Australian Financial Services Licence as required by law.
The investigation found approximately $8 million had been invested into property developments along the NSW coastal and hinterland areas.
The court has issued consent orders appointing Justin Walsh of Ernst & Young as liquidator of the scheme to ensure the orderly distribution of the companies’ assets to investors and creditors. It is estimated that over 70 investors are owed $13.5 million.
On November 17, 2006, ASIC obtained interlocutory consent orders restraining Mega-Money from further operations and promotion of the scheme.
The court made final orders that Sevelle be permanently restrained from operating or promoting any managed investment scheme and from dealing in financial products without holding an Australian Financial Services Licence.
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