The New South Wales Supreme Court has ordered an unlicensed financial adviser to pay over $1 million for his involvement in illegal mezzanine investments and banned him for life from financial services.
The adviser Donald Maxwell was described in an ASIC statement yesterday as the principle promoter of the two failed companies behind the schemes, ProCorp Investments and Central Development.
Eight directors from the two companies - owing a combined $14 million to investors - have also been restricted by the Court from managing companies.
ProCorp collapsed in 2004 owing 120 investors $10.8 million. Central Developments fell over owing 32 investors some $3.3 million.
Both companies advertised up to 30 per cent returns per annum on "secured and guaranteed loans". However, most of the loans were unsecured, according to ASIC.
Maxwell received 10 per cent commission on the investments he placed with the two NSW-based companies. He must pay $1.12 million - $936,500 in compensation, $110,000 in penalties and $55,500 in costs.
From ProCorp, a director Malcolm Fortune was banned for 12 years and ordered to pay a $250,000 penalty (including $50,000 in legal costs). He was personally responsible for raising over $1.6 million from investors. His son Troy Fortune, also a director, received a seven year ban.
Another ProCorp director, Miranda-based accountant John William Bennett, was given a five year ban from managing corporations and George Nahed awaits judgement.
From Central Developments, the three directors Jim Kolios, Roy Skaf and Jaul Jammal were banned from managing corporations for eight, five and three years respectively.
Sydney accountant Lloyd Coakley was banned for two years for his part in promoting the schemes.
