ASIC issues permanent ban on insolvent former authorized representative

Spurious claims by companies and their representatives which offer managed accounts promising high returns are often dubious. ASIC puts an end to Queensland-based rep’s career

Individuals and less-than-reputable companies which seek to bilk potential investors out of their capital by promoting managed schemes which paint a picture of exponential gains without substantiation have been the subject of increasing regulatory enforcement in recent times.

Today, one and a half years after filing for bankruptcy, Phillip Gregory Spark, a former director and officer of CS Heritage Securities which is also in liquidation, has permanently banned by the Australian Securities and Investments Commission (ASIC) from providing any form of financial services in Australia after the regulator found that he had been engaging in misleading and deceptive conduct.

CS Heritage Securities was an ASIC regulated firm which acted as a responsible entity for several further organizations which acted as trustees for a series of unregistered managed investment schemes, which in turn were used in order to fund property developments in and around Melbourne, Australia.

The managed funds took several formats, across many asset classes, until the firm’s demise in December 2012, with its annual meeting of creditors having been set last week by ASIC for April 10 this year, in order to discuss various matters including the receiving of an account of the acts and dealings of the liquidators, to consider, and if thought fit, approve the remuneration of the Liquidators, as well as to consider the approval of the appointment of a replacement member to the Committee of Inspection in reviewing the period of bankruptcy ending December 2013.

Mr. Spark, who resides in Surfers Paradise, Queensland, had also acted as a solicitor for CS Heritage since its incorporation until January 2012, and had been an authorised representative since May 2008 as well as acting as a project manager on CS Heritage’s projects until he was removed on February 21, 2012.

In deciding to ban Mr Spark permanently, ASIC found that he had made statements to a client that were false and misleading to induce the acquisition of a financial product when Mr. Spark knew, or ought to have known them to be false or misleading.

These false statements related to CS Heritage being the trustee for the Santandar Trust, as well as providing incorrect details about the Trust itself, following a similar pattern to High Yield Investment Programs (HYIPs) in which often outlandish pledges of high returns are proffered, with the funds collapsing long before any investor witnesses a gain.

Antipodean regulators have actively rooted out a number of such instances recently, a notable other having been a managed FX system operated by now-defunct Phoenix Forex under the name of OakFX which took place in New Zealand, resulting in the New Zealand FMA having pressed charges against its perpertrator, with the firm having been liquidated, whereas in Australia, a former currency trader was jailed for three years in December 2013 for making false claims including that the investments, which were eventually misappropriated, would generate high return with low risk.

In this particular case relating to CS Heritage Securities, ASIC also cites that Mr. Spark engaged in misleading and deceptive conduct by concocting the existence of the Santandar Trust, and using a name that closely resembled the name of a trust for which CS Heritage was the trustee, being the Santander Trust.

ASIC also found reason to believe that Mr Spark was not of good fame or character, with the regulatory authority’s Deputy Chairman Peter Kell having said that “ASIC would not tolerate this type of behaviour, and that those who engage in misleading and deceptive conduct will be removed from the industry.”

Mr Spark has the right to appeal to the Administrative Appeals Tribunal for a review of ASIC’s decision.

For more on the global Forex industry see the LeapRate-Dow Jones Forex Industry Report.


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