A director of two mortgage broking companies has been banned by ASIC from engaging in credit activities and managing corporations for four years.
Craig Eric Lynch of Sydney was the director of Paramount Financial Services (PFS) and Paramount Finance & Investment Services (PFIS), which were authorised to act as mortgage brokers.
An ASIC investigation found that Mr Lynch had breached his duties as a director of PFS and PFIS in his treatment of personal loan accounts held with those companies and in managing the taxation affairs of PFS.
The regulator found that Mr Lynch engaged in conduct that resulted in PFS submitting to a credit provider a loan application containing misleading income details of the applicant and a falsified supporting payslip.
According to ASIC, Mr Lynch was also aware of a practice at PFS and PFIS that clients were instructed to sign blank application forms, and had breached his duties as a director of PFS and PFIS in relation to the dealings on his personal loan accounts with those companies.
ASIC’s investigation also found that Mr Lynch diverted $1.6 million of company funds (a 10-year advance on his salary) to pay out a debt he personally owed to PFS, which went into liquidation seven months later, in November 2011.
Between approximately July 2011 and September 2011, Mr Lynch recorded $705,200 received from a third party as a reduction to his personal loan account with PFIS. ASIC noted that this money was supposed to be paid to PFIS as commission for property sales.
In both instances, ASIC found that Mr Lynch had misused his position as a director to gain an advantage for himself or cause detriment to the company.
PFS and PFIS were authorised to provide credit assistance by Australian credit licensee Paramount Lending Services (PLS). ASIC cancelled PLS’ Australian credit licence on 23 January 2014 at the request of Mr Lynch, the director of PLS.
Both PFS and PFIS are no longer trading.
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