Friday 25 January 2007 LAWFUEL – A South Australian company has had its Australian financial services licence (AFSL) cancelled following an investigation by the Australian Securities and Investments Commission (ASIC). First Pacific Securities (Australia) Limited (FPSA), trading from 193 Hutt Street, Adelaide, was the responsible entity of a registered managed investment scheme known as First Pacific Mortgage & Mezzanine Fund (FPMM) which pooled investor funds and then on lent to borrowers.
Investors in FPSA were offered four investment options – ‘First Mortgage’, ‘Second Mortgage’, ‘Bridging’ and ‘Select’ portfolios. ASIC’s investigation found FPSA issued a Product Disclosure Statement (PDS) for the FPMM dated 28 June 2004 and also issued two supplementary PDSs following changes to directors, officers and the ownership of FPSA. It also issued supplementary PDSs each time members’ funds were invested in specific mortgages under the ‘Select’ portfolio.
Following its investigation and a subsequent hearing, ASIC’s delegate found that: • FPSA had not complied with a number of its financial, reporting and other obligations as a financial services licensee in contravention of the Corporations Act including failing to be a member of an external dispute resolution scheme; • There was reason to believe that FPSA would not comply with its Corporations Act obligations as a financial services licensee in the future; and • FPSA’s application for an AFSL was false in a material particular in that it included a balance sheet which falsely reported assets sufficient to meet its financial obligations to obtain an AFSL. ‘Financial licensees must ensure that they act honestly and fairly when applying for their licence and at all times comply with their obligations under the Act’, said ASIC’s Executive Director of Enforcement, Ms Jan Redfern. FPSA has the right to lodge an application for review of ASIC’s decision with the Administrative Appeals Tribunal. For further information contact: Jan Redfern Executive Director, Enforcement Telephone: 02 9911 2191 Mobile: 0411 119 210 Emma Forehan ASIC Media Unit Telephone: 02 9280 3354 Mobile: 0409 702 310