According to an announcement from ASIC released this afternoon, Monarch FX Group and its former director and general manager, Quinten Hunter, have been restrained from carrying on, either directly or indirectly, a financial services business for four years following action by ASIC.
Monarch FX and Mr Hunter have been removed from the financial services industry after the Federal Court in Victoria made a declaration that Monarch FX carried on a financial services business without holding an Australian Financial Services Licence (AFSL) or being authorised by an AFSL holder to provide certain financial services, ASIC stated.
In turn, the court found Monarch FX was not licensed or authorised to make recommendations in relation to superannuation products.
The court accepted that Monarch FX recommended to members that they establish an SMSF to purchase its memberships, and then use money from their SMSF to trade in foreign exchange contracts, ASIC stated.
ASIC’s investigation found that many clients of Monarch FX set up their own SMSF and from the superannuation funds, deposited funds into trading accounts with FX brokers, Vantage FX Pty Ltd and AxiCorp Financial Services Pty Ltd.
The deposits ranged from $5,000 to $40,000, but were typically $10,000. The court was told that losses to the SMSF clients averaged out at 40 to 50 per cent, ASIC stated.
“Given the complexity of foreign exchange trading, consumers should understand the risks before investing, and particularly, before establishing a self-managed superannuation fund in order to trade in foreign exchange”, said ASIC commissioner Greg Tanzer.
Lewis is right – I’ve seen this first hand with property developers and ASIC even knew and couldn’t do anything as they were not licensed.
When is ASIC, the ALP and the industry super funds going to get it? You can make all the FOFA changes you like. The people who kep ripping off the public are not licensed in the first place. they couldn’t give 2 gigs for FOFA. They are not licensed in the first place. Crooks abound in every profession and you can’t stop that by legislation.
How dodge is this?
The Powers that Be should be focussed on hunting and thwarting these types and leave the mum and dad SMSF investors alone – they aren’t the ones playing these clever games.