ASIC has accepted an enforceable undertaking (EU) from a former Gold Coast property developer resulting in a 10 year ban from the financial services industry.
Under the terms of the EU, Susanne Percival has been banned from any involvement in the financial services industry, as an adviser, licensee or authorised representative of a licensee, for the next decade.
Percival entered into EU discussions with ASIC after it investigated the advice she gave to retail investors while acting as an authorised representative of AAA Shares.
The advice related to investments in a number of investment companies known as the IC Group which was operated under the management and control of Percival.
ASIC found that between May 2002 and September 2008, the IC Group investment companies raised over $20 million from at least 500 investors.
From about 2008, many of the property development companies experienced financial difficulties, with the appointment of receivers made and the forced sale of their development properties to satisfy debts to their principal financier, the National Australia Bank.
When the development companies were unable to meet their commitments to the investment companies, the investment companies were unable to meet their commitments to investors and the companies became insolvent.
ASIC became concerned that in providing her advice, Percival failed to adequately explain the basis of her advice, take into account many investors' personal circumstances, advise many clients of the unsecured nature and risks of the proposed investment and of her own interest in the financial products she was recommending.
ASIC was also concerned that when recommending and assisting a number of investors to transfer existing superannuation benefits into self-managed superannuation funds (SMSFs), Percival failed to provide them with the required comparative information regarding the switch costs and obligations associated with conducting an SMSF.
In a number of instances, statements of advice were not issued and where they were issued, they often did not contain the above prescribed information.
ASIC accepted the EU as an alternative to pursuing an administrative banning of Percival under section 920A the Corporations Act.
