ASIC has obtained declaratory orders and a permanent injunction in the Federal Court of Australia in Melbourne against SISS Business Systems Limited (SISS) and one of its directors, Mr John Christopher Knorr.

The court declared that between 1 July 2008 and 6 October 2009 SISS contravened sections 727(1) and 734 of the Corporations Act (the Act) by making offers of securities in itself without lodging a disclosure document with ASIC and by advertising offers of securities in it that needed a disclosure document.

The court also ordered by consent that SISS and Mr Knorr be permanently restrained from making an offer of securities, or distributing an application form for an offer of securities that needs disclosure to investors by way of a prospectus otherwise than in accordance with section 727 of the Act.

These orders finalise the proceedings that were commenced by ASIC against SISS and Mr Knorr in September 2009 (refer AD09-195).

ASIC alleged that SISS unlawfully raised in excess of $1.3 million by offering securities for sale without a disclosure document, in breach of the Act.

The defendants also agreed to contribute towards ASIC’s costs of the proceedings.

Background

On 6 October 2009, SISS and Mr Knorr provided an undertaking to the court that they would not make an offer of securities, or distribute an application form for an offer of securities, which needs disclosure by way of a prospectus otherwise than in accordance with section 727 of the Act. The undertaking remained in force until further order of the court.