The Federal Court has made orders to wind up an unregistered managed investment scheme after its operators were found to have misappropriated members’ superannuation.
Orders have been made to wind up MyWealth Manager, after it was found that it had encouraged clients of related company MCube Planners to roll out of their existing superannuation funds, establish their own SMSF and invest in MyWealth Manager.
Approximately $7 million was raised by the scheme, but the funds were not invested for the promoted purpose, the court found.
The court outlined that the evidence presented established that all of investors’ funds were misappropriated by Mustafa Mohammed, Mahek Mustafa and Mubashir Mohammed, who operated the scheme.
In his judgment, Justice Derrington stated: “The conduct, which was engaged in by the defendants, was of the most serious kind, directed as it was to the misappropriation of the superannuation savings of vulnerable people.”
The court found that the defendants contravened the Corporations Act by operating the unregistered scheme and failing to hold an Australian Financial Services Licence (AFSL).
The court also granted injunctions against the defendants, restraining them from carrying on a financial services business in Australia, without holding an AFSL.
Mustafa Mohammed, Mahek Mustafa and Mubashir Mohammed currently reside in India.
“Consumers should be wary when they are presented with investment opportunities offering high returns and should seek independent financial advice from a licensed financial adviser before making investment decisions,” said ASIC deputy chair Daniel Crennan QC.
ASIC also obtained an order that a related company, MyWealth Protection Pty Ltd, be wound up.
Timothy Norman and Robert Woods of Deloitte Financial Advisory Pty Ltd were appointed liquidators of the companies and the scheme.
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