The Federal Court of Australia has appointed a liquidator over a New South Wales central coast property development scheme and its associated companies following an application by ASIC.

ASIC alleges that Mega-Money Pty Ltd (trading as Sevelle Financial Services), its related companies and their director, Mr David Dayan Sevelle, of Wyong Creek New South Wales, operated an unregistered managed investment scheme between February 2004 and August 2006. ASIC further alleges that these companies and Mr Sevelle carried on a financial services business without holding an Australian Financial Services Licence as required by law.

During the time the scheme was in operation approximately $8 million was raised from retail investors to fund property development projects along NSW coastal and hinterland areas.

The Court ordered, by consent, the appointment Mr Justin Walsh of Ernst & Young as liquidator of the scheme and companies to secure and ensure the orderly distribution of scheme and company assets to investors and creditors. Approximately 70 investors are owed $13.5 million (including interest).

Mr Sevelle has also been permanently restrained by injunction from providing financial advice, dealing in financial products and/or carrying on a financial services business to members of the public including, without limitation, through the promotion and operation of any managed investment scheme.

ASIC previously obtained interlocutory consent orders on 17 November 2006 to protect assets and restrain parties from operating and promoting the scheme. Media Release 06-403 [MR 06-403] refers to this.

ASIC investigations are continuing.

Editor's note:

On 29 September 2008, Mr David Dayan Sevelle was permanently banned from providing financial services following an ASIC investigation. This banning order was made after ASIC found Mr Sevelle:

• operated an unregistered managed investment scheme;
• provided financial services without a licence or being a representative of a licensee;
• made statements to clients that were misleading or deceptive or likely to mislead or deceive;
• improperly assisted clients to obtain loans to invest in the scheme; and
• offered a Redemption or Selective Share Buy Back of Sevelle Corporation Limited Participating Cumulative Preference Shares outside the terms of the prospectus.