The Federal Court today delivered its judgment relating to declarations and bannings against Gold Coast businessman Craig Gore and other individuals for misusing more than $4 million raised from self-managed superannuation fund (SMSF) investors.

Declarations of contraventions and orders banning the defendants from providing financial services, including from carrying on any business related to superannuation interests, ranging from permanent to 7.5 years, have been made.

ASIC Commissioner Greg Tanzer said, ‘Today’s outcome shows the courts, ASIC and the community will not tolerate behaviour that seeks to destroy people’s lives.

‘With more than 539,000 SMSFs, over a million members, and assets totalling more than $550 billion, ASIC has ramped up its attention on a sector which is of growing importance to more Australian investors.’

Today’s judgment in the Federal Court in Brisbane saw Justice White make the following orders: 

• Craig Gore - permanently banned from providing financial services.
• Marina Gore - banned from providing financial services for 7.5 years.
• Mark Adamson - banned from providing financial services for 10 years (by consent).
• Jason Burrows - banned from providing financial services for 10 years and disqualified from managing companies for 10 years (by consent).
• Jeffrey George - permanently banned from providing financial services.
• Justin Gibson - banned from providing financial services for 7.5 years and disqualified from managing companies for 7.5 years (by consent).

In handing down his orders, Justice White found that it was appropriate to characterise Mr Gore’s conduct as dishonest. Justice White said, ‘Mr Gore’s taking of monies for his own personal use which was subscribed for the purpose of investment in real estate cannot be characterised in any other way.’

Damian Templeton and Darren Lewis of KPMG were also appointed as joint and several liquidators to the following defendant companies, which are based in Arizona USA, the British Virgin Islands (BVI) and the Cayman Islands:

• U.S. Realty Investments #1, LLC (L-1666059-6)
• U.S. Realty Investments #2, LLC (L-1666058-5)
• U.S. Realty Investments #3, LLC (L-1668734-4)
• U.S. Realty Investments #4, LLC (L-1668736-6)
• Syndicated Property Group Ltd (BVI Company Number 1678711)
• Worldwide Property Opportunities Ltd (BVI Company Number 1678279)
• Cayco Management (registration number Cayman Islands CR-265977)

Previously, in October 2013, the Court ordered that MOGS Pty Ltd (ACN 136 499 360) be wound up and that Michael McCann and Robert Killer of Grant Thornton be appointed as joint and several liquidators of the company.

It is the role of the liquidators to investigate and report to creditors about the companies’ affairs, realise the companies’ assets, enquire into the failure of the companies and possible offences by people involved with the companies and report them to ASIC and to distribute proceeds of any realisation of the companies’ assets in accordance with the priorities under the Corporations Act. ASIC will monitor the liquidation process but will generally not become involved in matters of commercial judgment by a liquidator.

ASIC’s guide on the process of liquidation may assist investors.

Justice White ordered that, with the exception of Graeme Stonehouse, the defendants pay 95% of ASIC’s costs of the proceeding. ASIC was ordered to pay 45% of Mr Stonehouse’s legal costs given that the allegations made by ASIC against Mr Stonehouse were found not to be proven.

Background

ASIC’s investigation into the group of individuals and financial services businesses, including Queensland-based ActiveSuper and Royale Capital began in November 2011, and launched civil proceedings in 2012 (refer: 15-110MR, 13-054MR and 12-161MR). The companies raised $4.75 million from more than 200 SMSF investors, and the scheme aimed to raise at least $20 million before ASIC intervened.

Editor's note 1:

On 19 June 2015, Mrs Gore filed a notice of appeal, appealing the findings against her, the period of disqualification, and her liability for costs.

On 8 July 2015, ASIC filed a notice of cross-appeal, seeking that the order made on 29 May 2015 restraining Mrs Gore from carrying on a financial services business for a period of 7.5 years be set aside, and that Mrs Gore be permanently restrained from carrying on a financial services business.

The appeal hearing has been listed for 22 and 23 February 2016, following the adjournment of the hearing originally listed for 4 and 5 November 2015.

Editor's note 2:

Mrs Gore's appeal was heard in the Federal Court Sydney over two days (22-23 February 2016). Judgment is reserved to a date yet to be fixed.

Editor's note 3:

Judgment on the appeals was delivered by the Full Court of the Federal Court on 13 February 2017. Both Marina Gore's appeal and ASIC's cross-appeal were dismissed.