ASIC today announced that it has permanently banned John Dimitropoulos of Seven Hills, NSW, from providing financial services or engaging in credit activity.
Mr Dimitropoulos' banning arises from ASIC's ongoing investigation into a property and self-managed superannuation fund (SMSF) promoting group, which includes the companies formerly called Heritage Financial Solutions Australia Pty Ltd (in liq) (Heritage Financial Solutions) and Sunpac Finance Pty Ltd (Sunpac Finance).
ASIC found that between 1 July 2010 and at least mid-2013, Mr Dimitropoulos engaged in a range of contraventions under financial services and credit laws. In particular, ASIC found he:
• made false statements to ASIC in Sunpac Finance’s annual compliance certificates about Sunpac Finance’s compliance processes and procedures;
• was involved in Sunpac Finance and Heritage Financial Solutions’ breaches of their general conduct obligations as credit licensees;
• was involved in Heritage Financial Solutions carrying on a financial services business without a licence; and
• engaged in conduct that demonstrated a fundamental lack of understanding of and regard for compliance with the law.
ASIC concluded that Mr Dimitropoulos was likely to contravene credit legislation and financial services law in future.
"Spruikers who recommend people invest in property via SMSFs, or facilitate such an investment, and who do not have an Australian financial services licence are breaking the law," ASIC deputy chair Peter Kell said.
"ASIC will act to protect the interests of investors, particularly in the growing SMSF sector, by permanently removing those whose conduct falls short of the required standards", Mr Kell said.
ASIC's decision was made on 23 June 2017. On 27 June 2017, Mr Dimitropoulos filed for a review of ASIC's decision in the Administrative Appeals Tribunal (AAT), together with an application seeking a stay of the banning decision and a confidentiality order. That application was heard by the AAT on 23 August 2017 and on 19 September 2017 the AAT delivered its decision refusing the application.
According to ASIC documents, Mr Dimitropoulos was at all relevant times the sole director of Sunpac Finance. While Mr Dimitropoulos was never appointed as a director of Heritage Financial Solutions, ASIC found that he was an integral person in the management of Heritage Financial Solutions.
Sunpac Finance arranged loans on behalf of its clients to buy real estate through SMSFs.
ASIC found that Heritage between at least February 2010 and mid-2013:
• sold real estate to its clients through SMSFs;
• arranged loans on behalf of its clients to buy real estate through SMSFs; and
• carried on a financial services business by providing financial product advice to clients to establish SMSFs and buy real estate through the SMSFs. Heritage was never authorised to provide financial product advice.
As part of its investigation, ASIC cancelled the credit licence of Heritage Financial Solutions (refer: 15-102MR) and of Smithson & Baye Pty Ltd (currently subject to a decision on appeal to the AAT) (refer: 15-228MR) ASIC also cancelled the credit licence of Sunpac Finance on 4 June 2015 on Sunpac's own application.
ASIC's investigation continues.