ASIC has Court Side with it Regarding AMS Holdings Case

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The Australian Securities and Investments Commission, or ASIC, has recently made definitive progress regarding its action against AMS Holdings (WA) Pty Ltd, AMS as a trustee of AMS Holdings Trust, and Chris Marco.

Allegedly Stealing $240 Million From 132 Investors

ASIC had hit Marco with allegations of cruising funds from investors since January of 2010, doing so in violation of Section 911A and Section 601ED of the Corporations Act 2001. 911A Mandates that all individuals doing so must hold an AFSL, with 601ED mandating that you must register such a scheme to meet certain criteria.

Tallying it up, Marco had managed to gain approximately $240 million, acquiring it from 132 separate investors. He falsely promised these investors that there was a guarantee that their principal investment was secured and safe. ASIC claimed that there stands a massive shortfall in assets available to operate this scheme into the future, however, making such promises ultimately false.

Succeeding In Gaining Interim Receivers

As it stands now, ASIC had succeeded in its application to the Federal Court of Australia. The application itself was for orders to appoint interim receivers over the assets of both AMS and Chris Marco. As it stands now, McGrathNicol, situated in Perth, will have Robert Brauer and Robert Kirman be appointed to act as interim receivers during this case.

The matter itself was heard on the 16th of March, 2020, with the decision handed out today by Justice McKerracher.

Justice McKerracher determined within his judgment that there was a strong need for this independent assessment. This is due to the highly uncertain nature that was the investment activities themselves that Marco had undertaken. Furthermore, the decision was influenced by repeated failures to generate material returns for most investors, having occurred over a long stretch of time.

Troubling Signs All-Round

Further evidence that Justice McKerracher stated was something that is based on ASIC’s evidence. There’s evidence that the pooling of investor funds had been done without the appropriate record-keeping, meaning that some of the “returns” from the investors have, in fact, come from contributions made by others. This occurred to such a degree that there is a shortfall in excess of $200 million when one compares between assets that the defendants held, and the amount that is stated to be owed to the investors.

The orders would then allow the interim receivers to both identify and value the properties available for distribution to the investors. Furthermore, they could see to the preservation of this property until such a distribution is ordered.

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