The Federal Court has made orders to wind up MyWealth Manager, an unregistered managed investment scheme (the Scheme). The Court found the Scheme had been operated by Mustafa Mohammed, Mahek Mustafa, Mubashir Mohammed and included related companies, MyWealth Manager Financial Services Pty Ltd (trading as MyWealth Manager) and 3M Financial Planning Pty Ltd (trading as MCube Planners) (collectively, the Defendants).
From at least February 2017, My Wealth Manager encouraged clients of MCube Planners to roll-out of their existing superannuation funds, establish their own self-managed superannuation funds (SMSF) and invest in MyWealth Manager.
Approximately $7 million was raised by the Scheme but the funds were not invested for the promoted purposes. The Federal Court found the evidence established that nearly all of the investors’ funds were misappropriated by those operating the scheme.
The Court made declarations that the Defendants contravened the Corporations Act by operating the unregistered Scheme and failing to hold the required Australian Financial Services (AFS) licence. The Court also granted injunctions against the Defendants, restraining them from carrying on a financial services business in Australia, without holding an AFS Licence.
In his judgment, Justice Derrington stated, ‘The conduct which was engaged in by the defendants was of the most serious kind, directed as it was to the misappropriation of the superannuation savings of vulnerable people..’
Mustafa Mohammed, Mahek Mustafa and Mubashir Mohammed currently reside in India.
ASIC Deputy Chair Daniel Crennan QC said, ‘Consumers should be wary when they are presented with investment opportunities offering high returns and should seek independent financial advice from a licensed financial advisor before making investment decisions.’
ASIC also obtained an order that a related company, MyWealth Protection Pty Ltd be wound up. Timothy Norman and Robert Woods of Deloitte Financial Advisory Pty Ltd were appointed liquidators of the companies and the Scheme.