Following an application by ASIC, the Federal Court in Melbourne has made orders appointing a provisional liquidator to the following companies: Ostrava Equities Pty Ltd, Ostrava Wealth Management Pty Ltd, Ostrava Asset Management Pty Ltd, Ostrava Securities Pty Ltd, Prometheus Capital Pty Ltd, Beta Pharmacology Pty Ltd, Thrive Lending Pty Ltd and Trade BTC Pty Ltd.
The directors of the various companies, Mr Bradley Grimm, a financial adviser, and Ms Vanessa Ash, a lawyer and director of Ostrava Equities Pty Ltd, consented to the orders.
Ms Leanne Chesser and Mr Craig Shepard, of KordaMentha, have been appointed by the Federal Court as joint and several provisional liquidators.
ASIC's application follows an investigation by ASIC in which it alleges that Mr Grimm and Ms Ash have been involved in multiple contraventions of the corporations legislation including unauthorised withdrawals of client funds and charging of fees by Ostrava Equities Pty Ltd, a company which provides financial services including establishment of self-managed superannuation funds (SMSFs).
In a hearing on 20 October 2015, the Federal Court ordered Ms Chesser and Mr Shepard provide a report to the court and to ASIC by 23 November 2015. The report will include an assessment of the financial position of each of the companies and any suspected contravention of the Corporations Act by the companies, Ms Ash or Mr Grimm.
The Court also made orders restraining the companies and Mr Grimm from being involved in a financial services business. Ms Ash gave an undertaking to the court to the same effect.
The matter is listed for a further Directions Hearing on 18 December 2015.
Investor/client queries should be directed to Annabel Martin of Korda Mentha on 03 8623 3352 or via email at amartin@kordamentha.com
Background
ASIC commenced legal proceedings in April 2015 (refer: 15-106MR) against Mr Grimm, Ms Ash and Ostrava Equities Pty Ltd, Ostrava Asset Management Pty Ltd and Ostrava Securities Pty Ltd.
Ms Ash is a current director of Ostrava Equities Pty Ltd and Ostrava Asset Management Pty Ltd. Ostrava Equities is an authorised representative of Marigold Falconer International Ltd. Ms Ash is also a director and authorised representative of Ostrava Securities Pty Ltd (AFSL No 436231).
Mr Grimm is a director of Ostrava Wealth Management, a joint director of Ostrava Asset Management Pty Ltd and former director of Ostrava Equities Pty Ltd. Mr Grimm is also an authorised representative of Ostrava Securities Pty Ltd and Marigold Falconer International Limited.
Editor's note 1:
At a hearing on 10 December 2015, following an application by ASIC, the Federal Court in Melbourne made orders freezing the net proceeds of sale of a property owned by Ms Ash, a lawyer and director of Ostrava Equities Ltd. The freezing orders will remain in place until the next hearing on 18 December 2015.
Editor's note 2:
On 18 December 2015, the Court widened the scope of the asset freezing orders made against Ms Ash granted on 10 December 2015. In addition to extending a freezing order made on 10 December 2015 over the proceeds of sale of Ms Ash's property, the Court restrained Ms Ash from paying, transferring, dealing or otherwise disposing with money or property held by her, whether such property be held in her own name, jointly held, or in the names of nominees or trustees, or incurring any debts or liabilities. The Court also converted an undertaking previously given by Ms Ash to an order restraining Ms Ash from being involved in a financial services business or providing financial advice.
On 23 December 2015, the Court ordered that the provisional liquidators are justified in causing the following companies to cease trading: Ostrava Equities Pty Ltd, Ostrava Wealth Management Pty Ltd, Ostrava Asset Management Pty Ltd, Ostrava Securities Pty Ltd, Prometheus Capital Pty Ltd, Beta Pharmacology Pty Ltd, Thrive Lending Pty Ltd and Trade BTC Ltd.
The matter is listed for a further Directions Hearing on 1 April 2016.
Editor's note 3:
At a hearing on 1 April 2016, the Court granted ASIC leave to join Equity Capital Partners Hedge Fund Pty Ltd, of which Mr Grimm is the sole director, to the proceeding. ASIC is seeking the winding up of Equity Capital Partners Hedge Fund Pty Ltd on just and equitable grounds. ASIC was also granted leave to amend its claim to seek orders disqualifying Ms Ash and Mr Grimm from managing corporations.
ASIC's application to wind up the corporate defendants has been listed for hearing on 21 June 2016. The remainder of ASIC's claims against the defendants have been listed for trial commencing 12 September 2016.
Editor's note 4:
On 21 June 2016, ASIC's application to wind up the corporate defendants was heard. The Court also heard ASIC's submissions in support of the declarations of contravention sought against the defendants. The defendants did not oppose the relief sought. Justice Davies has reserved her decision.