ASIC has cancelled the credit licence of Money Choice and banned its director, Matthew George, after an investigation found failures to comply with credit laws, responsible lending shortfalls and instances of unlicensed self-managed superannuation fund (SMSF) advice.
George is the sole director of Melbourne-based property investment and finance business, Money Choice Pty Ltd, which had been scheduled as an exhibitor at the Melbourne Home Buyer and Property Investor Show due to take place in August.
George was a regular seminar speaker on the topic: “How to build an efficent property portfolio inside and outside superannuation.”
ASIC labelled Mr George a “spruiker”.
He has been banned from engaging in credit activities for eight years and from providing financial services for three years.
ASIC said that between July 1, 2010 and August 23, 2012, Money Choice brokered residential investment loans to more than 40 clients who had purchased a unit on Queensland’s Sunshine Coast.
ASIC’s investigation found in brokering some of the loans, Money Choice and Mr George had:
- engaged in unlicensed lending
- been involved in organising loans from the unlicensed developer
- given misleading information to lenders
- failed to meet responsible lending conduct obligations, including failing to verify investor’s financial situation, and
- failed to have adequate arrangements in place to ensure clients were not disadvantaged by conflicts of interests that arose regarding commission payments.
The actions follow ASIC establishing an SMSF taskforce last year led by ASIC chairman Greg Tanzer to examine “high-risk SMSF issues”, with its first major project being to look at the “quality of advice provided to investors”.
“Mr George demonstrated through his conduct that he is not a fit and proper person to engage in credit activities,” ASIC deputy chairman Peter Kell said.
“This included some instances where Mr George preferred his own interests to those of Money Choice’s clients.”
Kell also said that “Mr George was found to have advised some clients to set up a SMSF for the purpose of purchasing property when he was not licensed to provide such advice.
“We do not want to see SMSFs become the vehicle of choice for property spruikers and the action we’ve taken against Mr George should serve as a timely warning of ASIC’s intention to ensure compliance with the law.
“ASIC is committed to improving the standards of advice given to investors regarding the establishment of SMSFs and the investments within the SMSF, including investment properties.
“Mr George did not competently carry out his duties as responsible manager and key person, and does not have the knowledge and skills to competently operate a credit business,” Mr Kell said.
Money Choice and Matthew George have the right to lodge an application for review of ASIC’s May 15 decision with the Administrative Appeals Tribunal.
This article first appeared on Property Observer.