Regulator punishes property and finance group

Regulator punishes property and finance group

smartphone
26 August 2015 by Staff Reporter 0 comments

ASIC has again flexed its muscles in the property sector by punishing a company that combined real estate and finance services.

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.

[Related: Senator slams ASIC action on property spruiking]

promoted content
Recommended by Spike Native Network
Listen to other installment of the Real Estate Business Podcast
reb top 100 agents 2016

With a combined sales volume of $13 billion in 2016, the Top 100 Agents ranking represents the very best sales agents in Australia. Find out what sets them apart and learn their secrets to success.

featured podcast

featured podcast
REVEALED: The 10 best agents in Australia for 2017

For the first time ever, the top 10 agents in the REB Top 100 Agents ranking are revealed in this exclusive podcast. ...

View all podcasts

Are dodgy agents being punished enough?

Yes (8.6%)
No (55%)
Only in some states (2.3%)
Not all dodgy agents are being found out (34.1%)

Total votes: 220
The voting for this poll has ended on: April 15, 2017
Do you have an industry update?