Federal Court grants ASIC’s orders against Linchpin
The Federal Court has allowed the Australian Securities and Investments Commission’s application against Linchpin Capital Group and Endeavour Securities.
In its decision, the Court said new material had made it clear that Linchpin engaged in activities related to an unregistered managed investment scheme when it was not authorised to do so.
The Court found that Linchpin required an Australian Financial Services License (AFSL), or authorisation under one, at the time the managed investment scheme took place, and there was “a rather strong case” that it did not.
The Court said while the respondents claimed Linchpin rectified the position by becoming the authorised representative of an AFSL holder, “ASIC has raised a rather strong case that the purported rectification of Linchpin’s erstwhile delinquent position is ineffective”.
It was found that the unauthorised issuing of interests in the unregistered fund was a serious matter and a substantive contravention of the Financial Services Act.
The Court referenced precedent and determined that where a party was “undoubtedly operating an unregistered scheme in contravention of the Act, it ought to be wound up”, and appointed receivers to both Linchpin and Endeavour.
Executive director of Linchpin Capital Group, Peter Daly, has issued Money Management with a statement that said while the Court had handed down its ruling, the findings would not impact operations for Beacon Group or its subsidiaries.
Daly said the findings were based on preliminary evidence and “the facts are yet to be fully tested in court”.
AUTHOR
Anastasia Santoreneos
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