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ASIC action against operators of managed investment schemes has led to the Federal Court of Australia making orders that Endeavour Securities (Australia) Ltd (Endeavour) and Linchpin Capital Group Ltd (Linchpin) contravened multiple provisions of the Corporations Act and that Endeavour and Linchpin be placed into liquidation.
The Court also ordered that the registered scheme operated by Endeavour and the unregistered scheme operated by Linchpin, both called ‘Investport Income Opportunity Fund’, be placed into liquidation.
At the closing of ASIC’s evidence in court, Endeavour and Linchpin agreed to the declarations of contravention and the liquidation of both companies and both funds.
The findings of contraventions include:
- That Endeavour in its role as responsible entity:
- did not act in the best interests of the members of the registered scheme known as the Investport Income Opportunity Fund;
- failed to ensure that the financial services it provided were provided efficiently and fairly;
- failed to exercise reasonable care and skill as responsible entity;
- engaged in related party transactions without member approval and
- failed to identify to Investport Income Opportunity Fund investors, the nature and extent of the related party transactions that were entered into.
- That Linchpin:
- operated an unlawful managed investment scheme;
- operated without an Australian Financial Services Licence; and
- engaged in conduct that was likely to mislead or deceive.
In making the orders, Justice Derrington stated:
‘Given the length and breadth of the non-compliances with the Act, there is more than sufficient justification for the winding up of both companies.’
Mr Jason Tracy and Mr David Orr from Deloitte have been appointed as liquidators of Endeavour, Linchpin and the two Investport Income Opportunity Funds. Investors and creditors should direct their enquiries to: firstname.lastname@example.org.
ASIC obtained interim orders against Endeavour and Linchpin in August 2018, appointing receivers and restraining Endeavour and Linchpin from dealing with assets and investor funds.