The Court has also made declarations that Macro, Property Tuition (21st Century Property) and Education Holdings (21st Century Education) breached various provisions of the Corporations Act by promoting and marketing the investment proposal.
The investment proposal was promoted using the tagline ‘Do you know how to buy Australian property, no money down?’. The proposed investment involved investors:
- becoming a director and shareholder of a company;
- acquiring properties from Macro through this company; and
- receiving a director’s fee but having agreed that Macro would be the sole decision maker for the company.
ASIC commenced proceedings in September 2015 against Macro, 21st Century Property and 21st Century Education in relation to the proposed investment had obtained interim injunctions stopping the proposal from continuing to be marketed.
His Honour Justice Beach made declarations that the marketing and promotion of the investment proposal by the companies was misleading and deceptive, and that investors had been procured into breaching director’s duties. The features of the proposal found to have been misleading or deceptive included:
- that the investment proposal was essentially risk free
- that it required no money down or capital, and;
- that there were no fees involved.
In relation to 21st Century Property and 21st Century Education, His Honour also declared that financial product advice had been provided in circumstances where neither entity was licensed to provide advice.
ASIC Commissioner Greg Tanzer said: ‘This is another significant outcome in ASIC’s ongoing campaign to promote trust and confidence amongst investors. We will continue to deter this type of misleading and deceptive conduct.’