IN SUMMARY:
In a first for an Australian Court, a $1.25 million penalty has been ordered against high profile property investment scheme promoter Sasha Hopkins for operating unregistered managed investment schemes.
The order serves as a reminder of the risks of illegally offering or promoting investment opportunities without a suitable AFSL and outside the regulatory regime of the Corporations Act.
We recently wrote about ASIC’s enforcement priorities for 2025, noting that one of those priorities is a focus on “unscrupulous” property investment schemes. We have also previously highlighted the perils of promoting an investment without holding an AFSL (for example, here, where we wrote about a recent NSW criminal conviction).
Although ASIC first commenced legal action against high profile property investment scheme spruiker Sasha Hopkins and his company The A Team Property Group back in 2022, the action (which only recently reached its successful conclusion) demonstrates the type of “unscrupulous” operators the regulator probably has in its sights.
Who is Sasha Hopkins?
Sasha Hopkins has been described as a “property mogul” and “real estate guru”, who ran The A Team Property Group, offering “coaching and mentoring” services and promoting property development schemes on social media, often involving clients with self-managed superannuation funds.
What happened?
Investors who participated were charged fees and usually required to sign loan agreements with entities associated with Mr Hopkins. Unfortunately, the developments and entities collapsed, leaving over $30 million owed, across many investors.
Neither Mr Hopkins nor The A Team Property Group held an AFSL. They were in fact raising money from unsuspecting investors illegally and operating a number of unregistered, illegal, managed investment schemes.
After firstly obtaining asset freezing orders against Mr Hopkins, ASIC pursued action in the Federal Court, for alleged unlicensed conduct and operating unregistered managed investment schemes.
ASIC was ultimately successful.
The Court’s decision
The Federal Court has ordered Mr Hopkins to personally pay a penalty of $1.25 million and be disqualified for four years. The Court also ordered that The A Team Property Group, five of the investment schemes and associated companies be wound up, and that receivers be appointed over the property of the schemes and related trusts.
Importantly, this is the first time a Court has ordered a pecuniary penalty against an individual person for operating an unregistered managed investment scheme. We don’t think it will be the last.
Lessons
Particularly given ASIC’s published areas of focus for 2025, we think more enforcement action of this nature, against unlicensed investment operators and promoters, is coming.
Those who continue to illegally offer or promote investment opportunities, without a suitable AFSL and outside the regulatory regime of the Corporations Act, should be aware and should be concerned.
If you wish to raise capital from investors (or if your clients do), then it is crucial to understand the rules. As we have said before, there are severe penalties – including imprisonment for up to five years – for people who do not comply with the rules, and that includes both the party raising the money and those who assist them. MARQ Trustees can help you and your clients understand those rules.
