A large property group has been found guilty by the Supreme Court of NSW of SMSF
Following ASIC action, the Supreme Court of NSW found that Park Trent Properties Group had been unlawfully carrying on a financial services business for over five years by providing advice to clients to purchase investment properties through an SMSF
In his judgment, his Honour Acting Justice Sackville said it was in the public interest that Park Trent be restrained from carrying on a financial services business.
ASIC launched legal proceedings in November 2014 against Park Trent who, by the time of the trial in June 2015 had advised over 860 members of the public to establish and switch funds into an SMSF
According to the regulator, in handing down his judgment, his Honour observed that Park Trent's business model depended on “persuading relatively unsophisticated investors of the virtues of using their superannuation accounts to purchase investment properties and to establish SMSF
s… Investors were influenced to make important decisions concerning their superannuation strategy with little or no genuine consideration of whether the decision took proper account of their individual financial circumstances. Some suffered financial loss as a consequence.”
His Honour also claimed Park Trent's CEO, Ronald Cross was willing to “ignore legal advice as to the nature of Park Trent's statutory obligations” and said this decision should serve as a warning to others who seek to influence clients to establish SMSF
s for investment purposes, without having the necessary licence to do so.
ASIC’s deputy chairman Peter Kell
said the regulator’s message is that anyone recommending or facilitating SMSF
s as a way of investing in property will need to have a licence and provide appropriate advice that prioritises the client's interests – otherwise they are breaking the law.
The parties have until 29 October 2015 to file submissions on the form of final orders.