The Federal Court in the case of Australian Securities and Investments Commission v ActiveSuper Pty Ltd (in liq) [2015] FCA 342 considered alleged contraventions of the Corporations Act 2001 (Cth) (the Corporations Act), Australian Securities and Investments Commission Act 2001 (Cth) (the ASIC Act) and the alleged involvement as accessories of other defendants in those contraventions. There were 18 defendants in total, which included individuals, and Australian and US companies.

The case follows ASIC’s investigation since 2012 into two Queensland-based self-managed superannuation funds (SMSFs) advice companies, ActiveSuper Pty Ltd (ActiveSuper)and Royale Capital Pty Ltd (Royale) (now known as ACN 143 832 053), who raised $4.75 million from more than 300 investors.

In July 2012, ASIC obtained court orders restraining ActiveSuper and Royale, as well as their directors, preventing them from carrying on their activities following concerns they had misled investors about their investments.


ASIC alleged that Australian investors were induced to establish SMSFs and to use their superannuation funds for investment in property in the US and in companies incorporated in the British Virgin Islands (BVI).  Most of the invested monies were not used for the purposes contemplated by the investors and has been substantially, if not wholly, lost.

Between 2010 and 2012, ActiveSuper and Royale, induced or assisted a number of persons to establish SMSFs. Royale distributed an ‘investment opportunity’ set out in a document entitled ‘US Deals Invest Now’ to a number of SMSFs. This ‘opportunity’ involved the SMSFs acquiring shares in an American company which would purchase ‘distressed’ real estate in the United States with a view to profit at the end of a five year period.

Approximately 187 SMSF investors acted on the offer and paid roughly $3.1 million to ActiveSuper for investment. ActiveSuper transferred approximately $1.4 million of this sum to bank accounts held by US companies of which it was the shareholder. Of that sum, approximately $455,000 was applied to the purchase of 14 properties in Arizona. None of the investors ever received any return on their investment nor were transferred shares in any company.


The defendants were prosecuted for:

failing to disclose as required by sections 727(1), and 727(2) of the Corporations Act; providing financial services without the appropriate Australian Financial Services Licence (AFSL) and thereby contravening section 911A(1) of the Corporations Act; and engaging in misleading or deceptive conduct in contravention of section 1041H of the Corporations Act and section 12DA of the ASIC Act. While readers might be more familiar with ‘misleading and deceptive conduct’ under the Competition and Consumer Act 2010 (Cth), the Corporations Act uses the same definition of conduct, but in the context of “dealing with” or “issuing” a financial product or services.

The ‘investment opportunity’ document provided to investors represented that their invested funds would be used to purchase shares in an American company, and purchase ‘distressed’ residential property to create an investment portfolio. It was also orally represented that returns of between 20% and 25% per annum would be paid to investors.

The Court noted that “The mere making of a promise which is not performed, or a prediction which is not fulfilled, is not, without more, misleading or deceptive”.[1]

ASIC alleged that each of the defendants were either directly or indirectly knowingly concerned in the contraventions of sections 727(1), 727(2), 911A(1) and 1041H of theCorporations Act, and section 12DA of the ASIC Act. The Court noted that personal liability for the purposes of s 1041H will attach to a person who is “responsible” for the conduct.[2]

ASIC sought injunctions restraining all defendants from engaging in businesses concerning financial products, financial services and superannuation interests, as well as engaging in other identified activities. ASIC also sought orders for the winding up of certain involved corporations.


The Court was satisfied of each of the above charges and made the declarations sought, and granted injunctions.

The Court also made orders for the winding up of involved companies (including the foreign corporations) because “the Court cannot have confidence in their proper management and in order to provide some measure of protection to investors”.[3] The Corporations Act grants the power to wind up foreign corporations under Part 5.7.

This decision builds on the body of case law in this area with the reminder that where confidence is lost in the provision financial services/products – in this case, through misleading and deceptive conduct – an order to wind up the involved companies, even foreign companies, can  be obtained.

The author wishes to acknowledge Law Clerk Kate Van Der Heyden for her contribution to this article.