The Australian Securities and Investments Commission (ASIC) has obtained orders in the Supreme Court of New South Wales banning Leslie Reginald Nelson from managing corporations for life and ordering him to pay $3 million in compensation to a number of unit trusts.

Mr Nelson, a Hurstville accountant, was previously the trustee of unit trusts into which about 120 investors, mainly elderly retirees, placed several million dollars over the last 10 years.

The Court made declarations that Mr Nelson mislead and deceived the investors into believing that the monies were to be invested in real property mortgages. In fact the money was used by Mr Nelson to prop up a failing agricultural business he owned and to purchase land in Mudgee to establish and maintain an olive grove project.

The Court also made declarations that Mr Nelson breached his duties as a director of the trustee companies as well as a number of other companies that owned and operated the olive grove project. The breaches occurred in circumstances where Mr Nelson stood to gain an advantage for himself as he was the sole shareholder of the companies that owned and operated the olive grove project.

Further declarations of the Court were that Mr Nelson:

• failed to maintain proper books and records for the companies under his control;
• operated an unregistered managed investment scheme;
• carried on a securities business without a dealer’s licence; and
• gave investment advice without a licence.

The orders state that Mr Nelson is banned for life from managing corporations but is entitled to apply for a variation of that order after five years.

Mr Nelson consented to the orders and declarations.