Australian Securities and Investments Commission v Marco (No 6)

The Australian Securities and Investments Commission (ASIC) filed proceedings against the defendants, alleging that they had engaged in unlawful conduct by operating a managed investment scheme and carrying on a financial services business without the necessary licenses. The defendants contested the allegations, but the Court found that they had indeed engaged in unlawful conduct. The Court was required to decide on the appropriate relief to be granted in light of the defendants' unlawful conduct. The Court found that it was just and equitable to wind up the scheme and the corporate defendant, and to appoint receivers on a final basis concurrently with liquidators. The Court also found that there was sufficient evidence to support the declarations sought and that injunctions should be granted to prevent the personal defendant from carrying on a financial services business or operating an unregistered managed investment scheme. The Court ordered that the scheme and the corporate defendant be wound up, and that the Receivers and Liquidators be appointed. The personal defendant was permanently restrained from carrying on a financial services business in Australia without holding an Australian financial services licence covering the provision of the financial services and from operating an unregistered managed investment scheme. The defendants were ordered to pay ASIC's costs of the proceedings.

The Court's decision was based on the evidence presented by ASIC, which included the affidavits of ASIC officers, four sample investors who contributed funds to the personal defendant, and forensic accounting experts employed by KPMG. The evidence suggested that the personal defendant had pooled funds from investors and used them to participate in 'private placement programmes' and to purchase real estate and vintage cars. The Court found that the personal defendant's conduct constituted the operation of a managed investment scheme, and that the corporate defendant was an extension of the personal defendant's business dealings. The Court also found that the personal defendant had carried on a financial services business without holding an Australian Financial Services License, and that the corporate defendant's holding of property assets formed part of the financial services business. The Court found that the relief sought by ASIC was appropriate, and that the winding up of the scheme and the corporate defendant was just and equitable. The Court also found that the appointment of a single insolvency practitioner to the whole scheme would save time and expense in the winding up. The Court ordered that the Receivers and Liquidators be entitled to reasonable remuneration and indemnity, and that the defendants pay ASIC's costs of the proceedings.