ASIC has disqualified a Sydney property adviser and director of an authorised mortgage broking firm from engaging in credit activities for four years.
Craig Eric Lynch was the director of Paramount Financial Services (PFS) and Paramount Finance & Investment Services (PFIS), which were authorised to act as mortgage brokers.
An ASIC investigation alleges that Lynch had breached his duties as a director of PFS and PFIS in his treatment of personal loan accounts held with those companies and in managing the taxation affairs of PFS.
The regulator alleges that in April 2011, Lynch diverted $1.6 million of company funds – a ten year advance on his salary – to payout a debt he personally owed to PFS. PFS went into liquidation seven months later in November 2011.
Between about July 2011 and September 2011, the ASIC investigation also found Lynch recorded $705,200 received from a third party as a reduction to his personal loan account with PFIS. That money was supposed to be paid to PFIS as commission for property sales.
In both instances, ASIC alleged he had misused his position as a director to gain an advantage for himself or cause detriment to the company.
ASIC also said that Lynch was not a fit and proper person to engage in credit activities. He was also banned from managing corporations for four years.
“The position of company director comes with certain responsibilities and when those responsibilities are breached, ASIC will take steps to remove directors from managing companies,” ASIC deputy chairman Peter Kell said.