Court winds up SMSF service provider, bans directors
The Federal Court in Melbourne has made orders winding up nine companies associated with a financial services business following conduct deemed “deliberate and in contumelious disregard of the law”.
The Federal Court made orders winding up Ostrava Equities Pty Ltd and eight other companies associated with the Ostrava financial services business and its proprietors Bradley Grimm and Vanessa Ash, ASIC said in a statement.
Following a successful application by ASIC, Leanne Chesser and Craig Shepard of KordaMentha were appointed as joint liquidators of Ostrava Equities, Ostrava Asset Management Pty Ltd, Ostrava Securities Pty Ltd, Ostrava Wealth Management Pty Ltd, Beta Pharmacology Pty Ltd, Prometheus Capital Pty Ltd, Thrive Lending Pty Ltd, Trade BTC Pty Ltd and Equity Capital Partners Hedge Fund Pty Ltd (the Companies).
The court also ordered Mr Grimm and Ms Ash be restrained from providing financial services for 20 and 10 years respectively, and disqualified from managing corporations for 15 and seven years respectively.
Justice Jennifer Davies made the winding up orders on just and equitable grounds, having regard to serious misconduct and mismanagement of the Companies’ affairs, including multiple breaches of financial services laws by the Companies and by Mr Grimm in his capacity as financial adviser to self-managed superannuation fund (SMSF) clients.
The court deemed that Ostrava Equities had engaged in dishonest conduct by charging unauthorised fees to clients, as well as contravening the Corporations Act by making misleading statements to clients about the value of their SMSFs, providing unlicensed managed discretionary account services, failing to comply with financial services disclosure obligations and failing to act in clients’ best interests.
The court found that both Mr Grimm and Ms Ash, who is a lawyer and former employee of ASIC, had breached their duties as company directors.
Justice Davies found that Mr Grimm’s conduct was “deliberate and in contumelious disregard of the law and statutory requirements”. She said Mr Grimm had “engaged in deliberate courses of conduct to enrich himself and the corporate group that he established at others’ expense”.
In addition, Justice Davies deemed that Ms Ash “either knew, or ought to have known, the standard of conduct required by law but she appears to have relied passively on Mr Grimm in the carrying on of the financial services business without proper supervision or exercising any independent or critical judgment”.
“This outcome sends a message that anyone who breaches financial services laws or their duties as company directors faces serious consequences. ASIC will not tolerate this kind of egregious misconduct,” ASIC Commissioner Greg Tanzer said.