05-273 Unlicensed financial services business stopped in WA
Tuesday 13 September 2005
The Australian Securities and Investments Commission (ASIC) has obtained permanent injunctions, by consent, against Swancove Enterprises Pty Ltd (Swancove) and Mr David Zohar, preventing them from operating an unlicensed financial services business.
Mr Zohar is the Managing Director of Swancove, a venture capital company based in Perth, Western Australia.
ASIC obtained the orders in the Federal Court in Western Australia following an investigation into the activities of Swancove.
Swancove and Mr Zohar consented to:
a declaration that Swancove carried on a financial services business by making representations intended to influence persons to acquire shares in a company associated with Mr Zohar without holding an Australian financial services licence (AFSL);
a declaration that Mr David Zohar was knowingly concerned in Swancove’s unlawful activities;
permanent injunctions that stop the company and Mr Zohar from making representations or being in any way concerned in or a party to any other person making representations to influence persons to acquire shares without holding an appropriate AFSL; and
sending notices to subscribers informing them of Swancove’s contravention and an offer for the return of monies.
‘ASIC has taken this action to protect the interests of consumers’, ASIC’s Deputy Executive Director of Enforcement, Mr Mark Steward said.
‘Consumers should be aware there are laws which regulate the operation of a financial services business and the people who conduct these businesses must be appropriately licensed’, Mr Steward added.
ASIC was awarded costs in the matter.
These proceedings follow an ASIC investigation into written advertisements containing recommendations intended to influence people to acquire shares in Red River Resources Limited, Corella Oil Limited and Australian Biogen Limited. Mr Zohar is a director of these companies. Between July 2003 and August 2004, Swancove used a bulk mailing company to send unsolicited letters to over 55,000 persons offering shares in the companies.