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Compliance & Regulation

Early release scheme operator convicted

A South Melbourne man has been convicted and fined $6000 in the Melbourne Magistrates Court after pleading guilty to operating an unlicensed financial services business promoting the early release of retirement savings benefits through SMSFs.

An Australian Securities and Investments Commission (ASIC) investigation found Grant Ross was promoting and operating a ‘round robin’ between 1 July 2010 and 13 November 2012 while he was sole director of both the Motabank and Multimedia Marketing organisations.

During this time, Ross was found to have run a scheme where clients rolled their superannuation benefits into newly established SMSFs and then lent the rollover proceeds to Ross.

The monies were then lent back to the clients in their personal capacity by Ross himself or via one of the companies he ran.

Despite orchestrating this scheme, Ross has never held an Australian financial services licence or Australian credit licence and has never been the authorised representative of a licensee.

The Magistrates Court’s sentencing took into account three breaches of legislation that prohibits Ross from engaging in credit activities without a licence.

“Ross exploited the trust he instilled in clients by promoting and operating an illegal scheme that exposed his clients to potential legal and financial risk,” ASIC deputy chair Peter Kell said.

“Consumers are urged to deal only with licensed representatives of the financial services and credit industries.”

An intelligence report from the ATO raising concerns over Ross’s activity triggered the corporate regulator’s investigation into Motabank and Multimedia Marketing.

The matter was prosecuted by the Commonwealth Director of Public Prosecutions.

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