The Australian Securities and Investments Commission (ASIC) has launched proceedings against a financial information and advice provider, Port Phillip Publishing, and its chief executive over two articles which promoted an investment strategy allowing consumers to ‘piggyback’ the Future Fund’s allocations.
Port Phillip Publishing recently launched a NZ version of its tip-sheet, ‘Money Morning’.
Kristan Sayce, the chief executive, however, told the advertising and marketing industry newsletter Mumbrella that the proposed penalties were “excessive” and “extraordinary” and were proportionately far larger than anything levelled against the banks after their misconduct. He intended to defend the case in the Federal Court.
The first article, ‘Everyday Australian Now Legally Piggybacking the Future Fund… and collecting extra monthly income injections of $540 right up to $6,667’, was published on Port Phillip Publishing’s website and emailed to 120,000 subscribers. A guide entitled ‘Your Quick Start Guide to Piggybacking the Future Fund’, was sent to 833 subscribers. Both articles were ‘misleading’ and deceptive’, ASIC has alleged.
Port Phillip Publishing targeted retirees and included client testimonials, which ASIC also alleges are false. The article and guide were misleading and deceptive as consumers could not mimic the performance of the Future Fund, ASIC said. As those in the funds management industry know, the Future Fund invests extensively through alternative and offshore managers. Port Phillip Publishing said it would find accessible products to closely match the characteristics of the Future Fund’s portfolio.
ASIC has requested the publication and Sayce pay a penalty, for Sayce to be disqualified from managing corporations, and that Port Philip Publishing and Sayce be restrained from carrying on a financial services business.
Sayce, who provided a statement to Mumbrella, reprinted on the newsletter’s website said the proposed penalty would see the business closed, put 70 staff members out of work and deny 50,000 subscribers advice.
Greg Bright is publisher of Investor Strategy News (Australia)