The financial services regulator has cancelled the Australian credit licence of Smithson & Baye after the Queensland firm contravened its obligations under the National Credit Act.
This action is part of an ongoing ASIC investigation into a property and SMSF-promoting group that the regulator accused of engaging in dubious financial practices.
The group includes Heritage Financial Solutions, which is now in liquidation, and Sunpac Finance. Ricardo Viana is the sole director of both Smithson & Baye and Sunpac Finance.
ASIC said that its ongoing investigation involves advice to investors to establish an SMSF for investment in real estate and the arranging of finance for those homes.
“Smithson & Baye purported to have accepted assignment of, and was collecting payments from borrowers in respect of, additional loans provided to clients of Heritage Financial Solutions and Sunpac Finance, beyond that which mainstream lenders would lend, to assist those clients to purchase real estate in Queensland through SMSFs,” it said.
ASIC expressed concerns about the structuring of the loans and property ownership.
The regulator also found that Smithson & Baye failed to ensure its representatives complied with the credit legislation or ensure its representatives were adequately trained.
Smithson & Baye is no longer permitted to engage in credit activity and will therefore be in breach of the National Credit Act if it collects repayments from investors.
Smithson & Baye has the right to appeal to the Administrative Appeals Tribunal.
ASIC recently used a Federal Court action to warn spruikers not to cross the line that separates real estate from financial services.