ASIC has banned Joel James Hewish for 10 years from providing financial services, performing any function involved in carrying on of a financial services business and controlling an entity that carries on a financial services business.
ASIC has also cancelled the Australian financial services (AFS) licence of Mr Hewish's company, United Global Capital Pty Ltd (UGC). ASIC found that UGC's authorised representatives contacted prospective clients and recommended they establish a self-managed superannuation fund (SMSF), rollover their existing superannuation into the SMSF and invest it in highly speculative investments related to Mr Hewish.
UGC's AFS licence was cancelled based on ASIC's findings that UGC:
- used a client onboarding process that lured people into investing their retirement savings in UGC-related products by having calls made to prospective clients using details including those obtained from a third-party website operator, offering them a free superannuation 'health check',
- through its authorised representatives, recommended investments to clients that included speculative investments in Global Capital Property Fund Limited in which Mr Hewish had an interest,
- attempted to contract out of its personal advice obligations whereas its representatives did give personal advice to clients in breach of those obligations, including by failing to act in clients' best interests and giving them inappropriate advice, and
- contravened a number of its general obligations as an AFS licensee including the obligation to do all things necessary to ensure the financial services authorised under its licence are provided efficiently, honestly and fairly; the obligation to take reasonable steps to ensure its representatives comply with financial services laws, and the obligation to have adequate arrangements in place to manage conflicts of interest.
ASIC banned Mr Hewish having found that he:
- was involved in UGC's conduct as its responsible manager and key person under the licence,
- demonstrated a fundamental lack of competence, and a cavalier attitude to his management of UGC and the importance of complying with financial services laws,
- created a culture of non-compliance and incompetence at UGC, and
- cannot be trusted to comply with financial services laws.
Mr Hewish and UGC have appealed to the Administrative Appeals Tribunal for a review of ASIC's decision.
ASIC's order cancelling UGC's licence and banning Mr Hewish was served on 3 June 2024, but ASIC has been unable to publish its decision until now due to interim orders restricting publication obtained by UGC and Mr Hewish in the AAT but lifted by the AAT on 25 July 2024.
Mr Hewish's banning is now recorded on ASIC's banned and disqualified register.
UGC was placed into voluntary administration on 5 July 2024. David Stimpson and Hugh Armenis of SV Partners were appointed Voluntary Administrators.
ASIC's investigation into the conduct of UGC, Mr Hewish and related entities is continuing. ASIC will provide updates on this matter on its United Global Capital page.
Background
UGC operated as an Australian financial services business based in Melbourne which held AFS licence no. 496179 since 18 August 2017.
Mr Hewish became a director of UGC on 8 November 2011 and had been the key person on the licence since 18 August 2017.
Mr Hewish was an authorised representative of UGC from 21 August 2017 to present.
Related property investment company, Global Capital Property Fund Limited (GCPF) was an authorised representative of UGC from 25 March 2020 to present.
ASIC made interim stop orders on 5 and 21 July 2022 preventing the offer of shares to retail investors under GCPF's prospectus as well as further interim stop orders on 29 August and 13 September 2022 preventing the issue of shares due to a deficient target market determination (23-002MR).
Although UGC's licence is cancelled, ASIC has specified the licence still has effect for limited purposes including that UGC continues to be an AFCA member until May 2025, and it continues to have insurance cover for clients.
On 20 June 2024 ASIC obtained interim orders from the Federal Court freezing the assets of UGC and GCPF (24-135MR). The proceedings regarding the interim orders have been adjourned to 9:30am on 6 August 2024.
Clients of UGC should consider seeking independent advice (with no connection to UGC) in relation to their own circumstances. Impacted clients should also consider lodging a complaint with the Australian Financial Complaints Authority if they are concerned about advice provided to them by UGC.
ASIC has issued warnings to consumers to be wary of high pressure sales tactics and online advertisements to lure consumers into receiving inappropriate superannuation switching advice (24-092MR). It is an ASIC cross-sector priority to deter cold calling superannuation switching business models. This priority has the broader aim of protecting consumers from cold calling practices that induce inappropriate superannuation switching and result in the erosion of members' superannuation balances.
