ASIC takes civil action against former Financial Adviser Mustafa Mohammed and Co

ASIC takes civil action against former Financial Adviser Mustafa Mohammed and Co
Staff reporterDecember 7, 2020

ASIC has commenced civil proceedings in the Federal Court against Mustafa Mohammed, Mahek Mustafa, Mubashir Mohammed, MyWealth Manager Financial Services Pty Ltd (trading as MyWealth Manager), MyWealth Protection Pty Ltd, 3M Financial Planning Pty Ltd (trading as MCube Planners) and Secure Investments Pty Ltd (together the Defendants).

ASIC is seeking declarations from the Federal Court that the Defendants have contravened the Corporations Act by operating an unregistered managed investment scheme called ‘MyWealth Manager’. ASIC alleges the scheme should have been registered and that the Defendants operated the scheme without holding an Australian Financial Services (AFS) licence.

On 21 November 2019, ASIC obtained interim orders in relation to the Defendants, including orders:

1. appointing Tim Norman and Rob Woods of Deloitte as Receivers and Managers of MyWealth Manager Financial Services Pty Ltd and 3M Financial Planning Pty Ltd;
2. restraining the assets of the remaining Defendants;
3. restraining the Defendants from carrying on a financial services business in this jurisdiction without an AFS licence;
4. restraining the Defendants from managing, directing, controlling or otherwise operating the unregistered scheme; and
5. restraining the Defendants receiving, soliciting, transferring or disposing of investor funds received in connection with the unregistered scheme.
6. ASIC alleges Mustafa Mohammed operated My Wealth Manager from February 2017and targeted consumers from certain ethnic and cultural backgrounds.

ASIC alleges the scheme has raised approximately $7 million from more than 55 investors where investors were encouraged to roll over their externally managed superannuation into newly created self-managed superannuation funds (SMSFs) and then invest the SMSF monies, by way of a loan, in MyWealth Manager.

ASIC also alleges that the Defendants used investor funds for their own personal use, including substantial payments to friends and family members and the promotion of cryptocurrency.

ASIC said their investigation is continuing.

The hearing has been adjourned to a date to be fixed after 5 December 2019.

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