A just released announcement from the Australian Securities & Investment Commission (ASIC) sees the Australian financial service licence (AFSL) of LSG Group Pty Ltd , formerly known as NZ Global Financial Trading Pty Ltd, Easy Capital Global Pty Ltd and AIFA Global Pty Ltd (ACN 154 582 242) (LSG) canceled. The cancellation of the AFSL has been effective since September 30th, 2015.
LSG held AFSL 418008 with authorizations to provide financial product advice, deal in a financial product and make a market in derivatives products to retail and wholesale clients.
LSG ran two websites – www.nzgft.com.au (Australian website) and www.nzgft.com (Chinese website).
Following a hearing, the ASIC Delegate found that LSG Group Pty Ltd…
- Had repeatedly failed to comply with the conditions on its licence and financial services laws, including failing to lodge financial statements, auditors reports, significant breach reports, and to notify ASIC of changes of control of the licensee or lodge a Product Disclosure Statement (PDS) in use notice. Breaches of licence obligations and financial services laws occurred over an extended period between 2013, 2014 and 2015 under both the current and former ownership and management of LSG. Remedial action was taken only after ASIC intervened and notably in each case, such action was not immediate and often took many months to occur.
- Made misleading or deceptive representations on its Australian website and its Financial Services Guide and PDS concerning products it offered, including a “Guaranteed Capital with Bonus Scheme Plan” and a “Cash Dividend Plan“.
- Made misleading or deceptive representations on its Chinese website including:
- An announcement and further statement promoting the “Guaranteed Capital with Bonus Scheme” Plan.
- A promotion titled “Win Double Profit for Expert Advisors Real Account. Expert Advisors masters can get $1 million US dollar“.
- Failed to do all things necessary to conduct financial services in an efficient, honest and fair manner in relation to a deposit of US$100,000 received from an overseas client.
Greg Tanzer of ASIC
ASIC has the power to suspend or cancel an AFSL where the licensee fails to comply with the condition on its licence or breaches a financial services law.
“Licensees will not be absolved of their obligations, including those relating to previous or ongoing breaches by a change in control or ownership. Any prospective new owners and managers should ensure they conduct adequate due diligence before acquiring a licence and assume responsibility of the licensees obligations,” commented ASIC Commissioner Mr. Greg Tanzer.
“It is vital that AFSL holders comply with their reporting requirements to ensure that creditors and investors who use financial reports, have the proper information to make informed decisions.” – ASIC Commissioner Greg Tanzer.
Investors can check if a company or individual is licensed by searching ASICs professional registers.
For more information on this case, see the official release by clicking here.