ASIC is seeking court orders to disqualify a New Zealand man and other individuals from managing corporations and operating managed funds.
The watchdog claimed the operators of 14 funds, operated principally by David Hobbs of New Zealand and former Vanuatu company Future Trading Corporation, did not hold an Australian financial services licence (AFSL) and targeted Australian investors and self-managed superannuation funds (SMSF).
ASIC alleged each of the defendants misled potential and existing investors and carried on a financial services business without the AFSL.
The watchdog also alleged Hobbs and other directors failed to act in the best interests of the companies and improperly used their positions to gain an advantage for themselves or others.
Nineteen defendants were named in the proceedings in the Supreme Court of New South Wales.
The funds include Integrity Plus Unit Trust, Super Save Superannuation Trust, Master Fund, First Secured Bond Unit, Enhanced Fund, Pinnacle Fund, Super Save, Covered Strategies, Prestige Unit Trust, Smart Money, Elite Premier, Elite Premier Option 2, The Good Value Fund and The Best Fund.
Over US$42 million was poured into the funds by more than 700 Australians since 2002, ASIC said.
The Super Save Superannuation Fund and Super Save specifically targeted investors for their superannuation money.
"ASIC asserts the scheme operators used offshore companies and required investors to set up their own offshore companies in countries such as the British Virgin Islands, Anguilla and Vanuatu so as to conceal the true nature of their operations and to circumvent Australia's financial services laws," ASIC said.
"ASIC claims most of the investors and SMSFs were promised access to offshore investment opportunities and/or the wholesale financial market generating returns in the order of 3-4 per cent or more per month and that there was no risk of losing the invested money.
"It is also alleged other investors were attracted into the funds by promises of a stake in offshore investment companies involved in project investment, principally in China."
It is ASIC's case that investors' funds were dispersed to various offshore accounts in New Zealand, Hong Kong and the US, and that some were also used, as in a ponzi scheme, to pay monthly returns to other investors, ASIC said.
"Only a portion of investors' funds were actually invested and, contrary to the promises made, these funds were used to engage in high-risk commodities, futures and options trading in the US," ASIC said.
ASIC was assisted by the United States Commodity Futures Commission, New Zealand Securities Commission and the Securities and Futures Commission of Hong Kong.
ASIC said it has asked that the funds be prevented from targeting Australian investors and SMSFs and that a liquidator be appointed to wind up the funds.
