a total $20 million has been banned from the financial industry for 10
years.
Susanne Rae Percival was working for a legitimate finance company,
Adelaide-based AAA Shares Pty Ltd, when she convinced customers to
invest in numerous privately owned companies without disclosing her
conflict of interest.
Ms Percival then used the money to fund property development projects
undertaken by a series of businesses under the banner IC Group, which
she operated from Bundall on the Gold Coast.
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She continued to provide the shonky investment advice for six years,
until the Australian Securities and Investments Commission launched an
investigation in late 2008.
By then she had raised more than $20 million from at least 500 investors.
According to ASIC, investor returns relied on the property development
companies generating profits that could be used to repay the
investment companies, which had on-lent the original funds at a higher
interest rate.
But from about 2008, many of the property development companies became
embroiled in financial difficulties and were placed into the hands of
receivers.
The properties were sold to repay the principal financier, the
National Australia Bank, and there was insufficient left to repay the
investment companies. They became insolvent, leaving the investors
empty-handed.
In a statement issued yesterday, ASIC said Ms Percival, who was
declared bankrupt on November 24 last year, had not warned potential
investors of the risks.
"Ms Percival failed to adequately explain the basis of her advice,
take into account many investors' personal circumstances, advise many
clients of the unsecured nature and risks of the proposed investment
or of her own interest in the financial products she was
recommending," the statement says.
"ASIC was also concerned that when recommending and assisting a number
of investors to transfer existing superannuation benefits into self
managed superannuation funds, Ms Percival failed to provide them with
the required comparative information regarding the switch costs and
obligations associated with conducting a self managed superannuation
fund.
"In a number of instances, Statements of Advice were not issued and
where they were issued, they often did not contain the above
prescribed information."
Ms Percival accepted an enforceable undertaking not to engage in
financial services until 2020.
