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Tuesday 9 June 2015

15-142MR ASIC bans promoter of non-existent fund

ASIC has banned Mr Paul Duncan, of Carrara, Queensland, from providing financial services for four years after an ASIC investigation found he had engaged in misleading and deceptive conduct.

ASIC's concerns related to false or misleading representations that appeared on the website of Active Captial Managers Pty Ltd (ACM) from as early as August 2013 in relation to 'Exalt Managed Futures Fund' (the fund). Mr Duncan has been the sole director of ACM since February, 2011.

ASIC was concerned that the representations were false or misleading because they were likely to give the impression that:

  • the 'Exalt Managed Futures Fund' (the fund) existed, and was issued by Exalt Global Fund Limited, the holder of an Australian Financial Services Licensee,
  • was fully regulated, and
  • was trading at low risk whilst generating high returns.

In fact:

  • the fund did not exist, nor was it ever in existence,
  • the fund did not operate under any financial services licence,
  • the fund was not regulated, and
  • the fund was not trading.

The ACM website did not contain any statements that the fund did not exist.

ASIC Commissioner Greg Tanzer said, 'The law requires that financial products and services be offered by licensed businesses and that the promotion and advertising of financial products does not mislead or deceive investors. ASIC will act to remove any individuals or companies from the financial services that do not abide by these obligations.'

Mr Duncan has the right to appeal to the Administrative Appeals Tribunal for a review of ASIC's decision.


Regulatory Guide 234 Advertising financial products and services (including credit): Good practice guidance (RG 234) provides guidance to help promoters comply with their legal obligations not to make false or misleading statements or engage in misleading or deceptive conduct.

Editor's note 1:

On 8 June 2015 Mr Duncan applied to the AAT for a review of ASIC's decision. The AAT hearing will be held on 8 April 2016.

Editor's note 2:

On 7 April 2016, the Administrative Appeals Tribunal approved an agreement reached by ASIC and Mr Duncan that the term of the banning order made against Mr Duncan be reduced from four years to three years, commencing on 21 May 2015 and ceasing on 20 May 2018.

Last updated: 09/06/2015 12:00