Fashion designer Lisa Ho is set to sue former friend and financial advisor Hamish McLaren for around $850,000, according to reports.
The move follows the closure of the long-established Lisa Ho fashion brand in late 2013, following administration.
Ho has reportedly lodged documents in the Federal Court to sue McLaren after he allegedly failed to deliver a return on a sum of $850,000 that Ho invested via her super fund, The Australian Financial Review reports.
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The paper reports that in 2013 he returned $200,000 of the money to Ho. It reported that Ho is suing for alleged misleading and deceptive conduct in regard to his ability to make a return on the investment.
TressCox Lawyers associate Levina Chim says ASIC has been cracking down on cases where financial advisors are misleading consumers, particularly when it comes to schemes and promising certain financial returns.
She says that financial advisors are meant to give full disclosure of the possible outcomes of investment in a standard fact sheet, with ASIC targeting those that fail to comply.
Chim says small business owners looking to invest should carefully read disclosures, and be sure to look twice at unusual investment vehicles, and seek independent financial advice.
The case for Lisa Ho is one of many challenges the designer has faced in recent times, following the collapse of her business in May 2013. The ATO brought up the issue of a possible “phoenix” situation after the designer bought the intellectual property to the brand.
At the time of administration, the business was reportedly in debt of around $11 million, and around 100 staff were put out of work.
All Lisa Ho retail stores closed on July 7 last year, followed by a final warehouse sale of unsold apparel. However, the Lisa Ho eyewear intellectual property was sold to luxury eyewear producer and distributor Face Optics on June 28.