ASIC commences Federal Court action against Daly and Linchpin directors
The Australian Securities and Investments Commission (ASIC) has commenced Federal Court proceedings against the current and former directors of Linchpin Capital and Endeavour Securities, including the high-profile Peter Daly.
The regulator said the proceedings alleged breach of duties as officers of a responsible entity of a registered managed investment scheme (MIS) and named the defendants as Daly, Ian Williams, Paul Rafter and Paul Nielsen.
It noted that Williams, Nielsen and Rafter were directors of Endeavour when it operated the Investport Income Opportunity Fund and that it would be alleged that Daly, while not appointed as a director acted as an officer.
ASIC said all four defendants were directors of Linchpn at the time of the alleged conduct.
In March 2019, in separate proceedings, ASIC successfully obtained orders against Linchpin and Endeavour for multiple contraventions of the Corporations Act relating to the operation of the Fund and a second managed investment scheme, operated by Linchpin, also called the Investport Income Opportunity Fund. ASIC alleges in the current proceedings that each of the defendants were personally involved in contravening conduct about which the Court made orders in March 2019. ASIC further alleges that the defendants failed to act in the best interests of investors in the Fund.
It is also ASIC’s case that Daly and Raftery made improper use of their positions as officers of Endeavour to gain a financial advantage for themselves.
ASIC is seeking declarations of breaches of s601FD of the Corporations Act and the imposition of civil penalties as well as orders that Williams, Nielsen, Daly and Raftery be disqualified from acting as directors for a period of time.
The first case management hearing is listed on 22 September, 2020.
Recommended for you
Financial Services Minister Stephen Jones has shared further details on the second tranche of the Delivering Better Financial Outcomes reforms including modernising best interests duty and reforming Statements of Advice.
The Federal Court has found a company director guilty of operating unregistered managed investment schemes and carrying on a financial services business without holding an AFSL.
The Governance Institute has said ASIC’s governance arrangements are no longer “fit for purpose” in a time when financial markets are quickly innovating and cyber crime becomes a threat.
Compliance professionals working in financial services are facing burnout risk as higher workloads, coupled with the ever-changing regulation, place notable strain on staff.
