MELBOURNE: The Australian Securities and Investments Commission (ASIC) is taking legal action to disqualify unlicensed operators of 14 offshore managed investment funds who allegedly misled 700 investors by operating like a Ponzi scheme.
ASIC has asked the NSW Supreme Court to disqualify New Zealander David Hobbs and eight other individuals
and offshore companies from managing corporations and operating managed investment funds, after they allegedly attracted US$42 million ($59.3 million) from local investors.
The corporate regulator also asked the court to appoint a liquidator to wind up the funds.
The funds allegedly targeted Australian investors and self-managed superannuation funds, promising no risk for monthly returns of between three and four per cent, ASIC said.
More than 700 Australians invested more than US$42 million in 10 funds since 2002, and were attracted by promises they would gain a stake in offshore investment companies, it said.
"In fact, investors' funds were dispersed to various off-shore accounts including in New Zealand, Hong Kong, and the US and some were used, as in a Ponzi scheme, to pay monthly returns to other investors."
The commission alleges Hobbs, of Nelson, controlled the operation of all 14 funds. The proceedings name 19 defendants.
ASIC also is seeking court orders that Hobbs, his wife Jacqueline Hobbs, Min Hua Li and David Collard, both of NSW, also pay a financial penalty.
- AAP
