ASIC has banned Paul Nielsen, a former director of Endeavour Securities (Australia) Ltd (Endeavour) and Linchpin Capital Group Ltd (Linchpin), from providing any financial services for a period of five years.

In March 2019, ASIC obtained orders in the Federal Court against Linchpin and Endeavour for contravening multiple provisions of the Corporations Act while operating two managed investment schemes, both called ‘Investport Income Opportunity Fund’ (19-065MR).

ASIC has banned Mr Nielsen for his role in the operation of the managed investment schemes by Linchpin and Endeavour.

ASIC found Mr Nielsen’s conduct in approving the investment of funds of the Investport Income Opportunity Fund in related entities constituted multiple contraventions of the Corporations Act.

In particular, Mr Nielsen:

• failed to act in the best interests of the members of the Investport Income Opportunity Fund; and
• used his position as an officer of the companies to gain an advantage for other persons and cause detriment to members of the Investport Income Opportunity Fund.

ASIC found Mr Nielsen did not understand the importance of the duties of a director to protect members of registered schemes and, as a result, his conduct put significant amounts of other people’s money at risk.

The banning order for Mr Nielsen has been recorded on ASIC’s publicly available Banned and Disqualified Register.

Background

On 15 March 2019, the Federal Court of Australia made orders that Endeavour and Linchpin contravened multiple provisions of the Corporations Act. As a result, the court ordered the winding up of Endeavour, Linchpin and the two Investport Income Opportunity Funds (19-065MR).

Mr Jason Tracy and Mr David Orr from Deloitte have been appointed as liquidators of the entities. Investors and creditors should direct their enquiries to: linchpin@deloitte.com.au.

Editor's note:

On 29 May 2020, ASIC published 20-122MR detailing banning orders made for Mr Ian Williams, Mr Paul Raftery and Mr Peter Daly, who were also directors of Linchpin and Endeavour. The three banning orders were not publicised at the same time as Mr Nielsen’s as Mr Williams, Mr Daly and Mr Raftery each appealed the banning order to the Administrative Appeals Tribunal and applied for a stay of the decision and a confidentiality order preventing publication. The Administrative Appeals Tribunal dismissed the applications for stay and confidentiality orders on 27 May 2020.