In the matter of Idylic Solutions Pty Ltd - Australian Securities and Investments Commission v Hobbs [2013] NSWSC 106

In the matter of Idylic Solutions Pty Ltd - Australian Securities and Investments Commission v Hobbs [2013] NSWSC 106

Permanent disqualification orders from management of corporations and financial services, and substantial pecuniary penalties, are warranted against first, third, fourth, and eighth defendants for serious and sustained contraventions of the Corporations Act and ASIC Act in operating unregistered managed investment schemes, providing financial services without a licence, making misrepresentations, and improper use of position to benefit themselves to the detriment of their companies and investors. The 'Adler' factors and public protection and deterrence were applied. Coercive and protective orders, including asset receivership, are justified given the scale and dishonest nature of the...

Parties
Plaintiff: Australian Securities and Investments Commission; First Defendant: David John Hobbs; Second Defendant: Min Hua Li; Third Defendant: David John Collard; Fourth Defendant: Huimin Wu; Fifth Defendant: Con Koutsoukos; Sixth Defendant: Brian John Wood; Seventh Defendant: Jimmy Truong; Eighth Defendant: Jacqueline Hobbs; Ninth Defendant: Idylic Solutions Pty Ltd ACN 121 960 754; Tenth Defendant: 888 Management Inc; Eleventh Defendant: Geneva Financial Ltd; Twelfth Defendant: Barclaywest Ltd; Thirteenth Defendant: Preserved Investment Group Ltd; Fourteenth Defendant: North Wave Ltd; Fifteenth Defendant: G P Global Ltd
Jurisdiction
Australia
Judgment Date
21 February 2013
Procedural Posture
Civil Penalty Proceedings / Consequential Orders / Penalty Determination and Consequential Orders After Liability Judgment
Outcome
Declarations, penalty and disqualification orders made; costs awarded as specified; orders for winding up schemes and appointment of liquidator and receiver; permanent or lengthy disqualification and restraint orders against four individual defendants; pecuniary penalties imposed as specified; other consequential...
Legal Topics
Civil Penalties, Disqualification Orders, Unregistered Managed Investment Schemes, Unlicensed Financial Services, Director's Duties, Misrepresentations, Asset Freezing and Receivership
Corporations Law Financial Services Law Civil Penalties Disqualification Orders Unregistered Managed Investment Schemes Unlicensed Financial Services Director's Duties Misrepresentations +1 more

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Parties

Australian Securities and Investments Commission

Plaintiff

David John Hobbs

First Defendant

Min Hua Li

Second Defendant

David John Collard

Third Defendant

Huimin Wu

Fourth Defendant

Con Koutsoukos

Fifth Defendant

Brian John Wood

Sixth Defendant

Jimmy Truong

Seventh Defendant

Jacqueline Hobbs

Eighth Defendant

Idylic Solutions Pty Ltd ACN 121 960 754

Ninth Defendant

888 Management Inc

Tenth Defendant

Geneva Financial Ltd

Eleventh Defendant

Barclaywest Ltd

Twelfth Defendant

Preserved Investment Group Ltd

Thirteenth Defendant

North Wave Ltd

Fourteenth Defendant

G P Global Ltd

Fifteenth Defendant

Procedural Posture

Civil Penalty Proceedings / Consequential Orders / Penalty Determination and Consequential Orders After Liability Judgment

Legal Issues

  1. 1 Whether disqualification orders and pecuniary penalties should be imposed on individual defendants for multiple contraventions of the Corporations Act and ASIC Act in relation to operation of unregistered managed investment schemes and the provision of unlicensed financial services;
  2. 2 Appropriate periods and scope for disqualification and financial services restraint orders;
  3. 3 Appropriate quantum of pecuniary penalties;

Ratio Decidendi

Permanent disqualification orders from management of corporations and financial services, and substantial pecuniary penalties, are warranted against first, third, fourth, and eighth defendants for serious and sustained contraventions of the Corporations Act and ASIC Act in operating unregistered managed investment schemes, providing financial services without a licence, making misrepresentations, and improper use of position to benefit themselves to the detriment of their companies and investors. The 'Adler' factors and public protection and deterrence were applied. Coercive and protective orders, including asset receivership, are justified given the scale and dishonest nature of the...

Court Disposition

Declarations, penalty and disqualification orders made; costs awarded as specified; orders for winding up schemes and appointment of liquidator and receiver; permanent or lengthy disqualification and restraint orders against four individual defendants; pecuniary penalties imposed as specified; other consequential...

Orders

  • First defendant (Hobbs): Permanent disqualification from managing corporations; permanently restrained from operating/promoting managed investment schemes or providing financial services without AFSL; ordered to pay pecuniary penalty of $500,000.
  • Third defendant (Collard): Disqualified from managing corporations for 20 years; permanently restrained from relevant conduct; ordered to pay pecuniary penalty of $150,000.