The Australian Securities and Investments Commission (ASIC) is hot on the heels of an unlicensed financial services business that appears to have cobbled together its track record from those of a number of legitimate companies.
ASIC has urged the industry and consumers to avoid Connaught Investment Group, that purports to be based in the Sydney suburb of St Leonards, and which offers fake investment opportunities.
The group is not registered as an Australian company.
“Connaught Investment Group does not hold an AFS licence, which is required under the Corporations Act,” said an ASIC statement.
“The St Leonards addresses for both Connaught Investment Group and Diversified Strategies Pty Ltd are an unrelated dance studio. Calls to their various telephone numbers are no longer answered.”
However, a Google search for the company revealed a Connaught Investment Group based in St Leonards through the connaughtfinancialplanning.com website and provided a phone number.
A receptionist identified the company as Connaught Financial Planning but was unable to answer any questions from Professional Planner Online.
A person identifying himself as Paul then returned our call but became flustered when questioned about the regulator’s concerns and hung up. Further calls were answered by the receptionist who claimed management were in a meeting.
ASIC has noted that the Connaught Investment Group in question is not associated with the registered company Connaught Consultants (Finance) Pty Ltd (ACN 002 102 203), which holds a legitimate AFS licence and is based in the nearby Sydney suburb of Crow’s Nest.
Luxury boats and super-cars
A spokesperson for the regulator said the fraudulent group’s website was a giveaway with ostentatious photos of luxury boats and super-cars prominently displayed.
Despite masquerading online as an independent financial services group with offices around Australia, most prospective investors have been lured by representatives of Connaught Investment Group cold-calling them to offer advice on a range of financial products.
According to ASIC, Connaught staff offering advice quote the Australian Financial Service (AFS) licence and Australian Company Number (ACN) of a legitimately registered AFS licence holder in a bid to add credibility to their sales pitch.
They claim to offer advice on warrants, futures, commodities trading, foreign exchange trading, portfolio administration as well as online trading and investor seminars.
Prospective investors are asked to transfer funds into a bank account in the name of Diversified Strategies Pty Ltd, which is registered as an Australian company and has the same business address as the Connaught Investment Group.
Investors are then given a password to the website, www.connaughtfinancialplanning.com, which enables them to check the fictional status of their investment.
ASIC is presently taking steps to have the website removed from the internet.
The scale of the deceit is breathtaking with The Sydney Morning Herald today (12 June) reporting that “Connaught also reckons its ‘cash management solutions are used by more than 400,000 investors and more than 10,000 financial advisers’. Funny, Macquarie Group thinks that is the depth of its cash management accounts offering.”
ASIC Commissioner Greg Tanzer says investors should be cautious when offered unsolicited investment advice.
“Making a few basic checks on your investment, before you sign away your hard-earned money, is critical. I strongly urge potential investors to scrutinise all investment opportunities closely and seek professional, licensed advice before making investment decisions,” he said.
