Mortgage broker gets ASIC life ban for deceptive conduct

A Sydney mortgage broker who advised clients to invest up to $7 million in a Hong Kong business called US Mortgage Giant has been permanently banned by ASIC from providing financial services. 

An ASIC investigation found that Erin Watson, 35, of Woolooware, NSW had engaged in misleading and deceptive conduct by enticing about 100 investors from the Hunter Valley, Sydney, Canberra and Wollongong to join the scheme between 2005 and 2007. 

ASIC found that from September 2006 to March 2008 Watson used clients’ money to pay her home loan, family members, clients of Home Equity and companies associated with Home Equity.

Watson was a director of Home Equity Pty Ltd and still remains a director of a number of companies including, but not limited to, Home Mortgages Australia Pty Ltd. 

A search across Yellow Pages reveals a Home Equity Pty Ltd located at Level one 7/448 458 Parramatta Road in Strathfield, Sydney. The company is listed as a “financier”. Calls to the number did not go through.

According to ASIC, between March 2007 and February 2008 neither Watson nor the aforementioned companies held an Australian Financial Services licence, nor was she an authorised representative of an AFS licensee.

However, during this period Watson met with potential investors, dealt with clients and signed agreements entered into by Home Mortgages Australia. 

Watson representing to clients that they would be investing in a large experienced overseas company based in Hong Kong known as US Mortgage Giant, which she told them invested in property and finance. 

She convinced investors their investments were “watertight” by lodging documents with ASIC that US Mortgage Giant was a legal entity and a significant shareholder of Home Mortgages Australia and a number of associated companies. 

Watson told investors they were investing in a tax deduction scheme which she said had Tax Office approval while it was in fact being investigated by the Tax Office, the SMH reported in June last year. 

In July 2009 she told investors she was winding up the scheme. 

Watson has the right to apply to the Administrative Appeals Tribunal for a review of ASIC’s decision.

Larry Schlesinger

Larry Schlesinger

Larry Schlesinger was a property writer at Property Observer

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