The former director of disgraced advisory firm Streetwise has been arrested in the United States pending filing of a formal extradition request to Australia.
Kovelan Bangaru was apprehended by the Californian authorities with a warrant based on 16 charges under the NSW Crimes Act.
ASIC alleges Bangaru, whose company Streetwise went bust in 2005 owing over $16 million, spent investors' cash on propping up his company rather than on the agreed purpose.
ASIC also alleges that Bangaru obtained loans under false pretences in order to buy luxury cars and to cover his own business expenses.
Streetwise procured investors by spruiking its services at shopping centres and by word of mouth. It advised and assisted its clients to use the equity in their homes to invest. Some also invested their savings.
Bangaru is now in custody in the US while ASIC files a formal request for his extradition.
The matter is being prosecuted by the Commonwealth Director of Public Prosecutions.
ASIC's investigation is continuing.
ASIC had a busy week. It also slapped a two-year ban on three NSW planners for flouting financial services laws.
