Risqy Limited, Re (No 2)

In the case of Risqy Limited, Re (No 2), the Court considered several significant legal issues regarding the operation of a managed investment scheme, the provision of financial services, and the issuance of financial products. The dispute involved the liquidators of Risqy Limited, the first respondent, and the second respondent, who was the sole director of Risqy Limited and had been actively involved in its operations. The court was required to determine whether the second respondent operated the scheme, provided financial services, and issued financial products without the necessary licenses and disclosures under the Corporations Act 2001 (Cth).

The court found that the second respondent did indeed operate the scheme, providing financial services and issuing financial products without the requisite licenses and disclosures. The court held that the second respondent's actions constituted operating a managed investment scheme, carrying on a financial services business, and issuing financial products without the necessary authorisations. Furthermore, the court determined that the interests held by investors in the scheme constituted financial products for the purposes of the Act, and the second respondent had failed to provide the required product disclosure statements.

In addition to these findings, the court considered the availability of an injunction to restrain the second respondent from dealing with the scheme's property, given the significant shortfall in assets relative to creditors' claims. Despite the second respondent's failure to appear and the lack of evidence regarding his current assets, the court granted an injunction to protect the scheme's property from further dissipation.

The court's final orders declared the second respondent's contraventions of specific sections of the Act, restrained him from dealing with the scheme's property, and ordered him to pay the liquidators' costs. Additionally, the second respondent was granted liberty to apply to discharge or vary the restraining order after providing written notice to the applicant.