Guardian Securities Limited To Pay $98,000, Says AFCA

Complaint

Guardian Securities Limited is the Responsible Entity (RE) for a registered managed investment scheme specialising in real estate development. On 14 April 2020 the complainant, Mr G, invested $100,000 in one of the RE’s funds (the Project). Mr G says the Product Disclosure Statement (PDS) for the Project was defective because of it:

• included inaccurate information about the Project’s Investment Manager; and
• excluded relevant information about the Project’s Investment Manager.

Mr G says that Guardian Securities should not have accepted his investment application as a result. Guardian Securities says it gave Mr G all necessary disclosures before he invested.

Key Findings

AFCA determined the breach has caused Mr G a reasonably ascertainable loss and it is fair that he is compensated. The outcome is fair because it holds the financial firm to its obligations under the Corporations Act. Allowing the financial firm to take an assignment of Mr G’s investment is also fair as it avoids a scenario where Mr G may derive a future benefit from the financial firm’s breach.

Determination

AFCA’s determination is in favour of the complainant. The complainant has 30 days to accept the determination. If he accepts, Guardian Securities Limited must pay $98,334.25 to the complainant, together with interest and costs. Mr G must take all reasonable steps to assign his units in the Project to the financial firm on request in accordance with the terms of this determination.

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