ASIC Cancels United Global Capital License, Bans Director

Due to misconduct, ASIC canceled the United Global Capital license and banned director Joel Hewish for ten years.

Key Points

• ASIC Cancels License: ASIC canceled UGC’s AFS license due to serious misconduct.
• Director Ban: ASIC banned Joel James Hewish from financial services for ten years.
• Misconduct: UGC misled clients into high-risk investments and failed to meet advice obligations.
• Appeal and Administration: UGC entered voluntary administration, and both UGC and Hewish appealed ASIC’s decision.

In a significant regulatory action, the Australian Securities and Investments Commission (ASIC) has canceled United Global Capital Pty Ltd (UGC) ‘s Australian Financial Services (AFS) license and imposed a 10-year ban on its director, Joel James Hewish. Effective 3 June 2024, the decision follows severe breaches of financial services laws and misconduct.

Regulatory Findings

ASIC’s investigation revealed that under Hewish’s management, UGC engaged in unethical practices that jeopardized client interests. The investigation found that the company’s authorized representatives contacted potential clients with misleading offers to establish self-managed superannuation funds (SMSFs), roll over existing superannuation funds, and invest in speculative assets associated with Hewish.

Specific breaches included:

• Misleading Client Onboarding: UGC lured prospective clients with offers of a free superannuation ‘health check’ obtained through third-party websites, leading them to invest their retirement savings into UGC-related products.
• Conflicted Investment Recommendations: Authorized representatives advised clients to invest in the Global Capital Property Fund Limited, a speculative investment in which Hewish had a personal interest.
• Failure to Comply with Advice Obligations: UGC’s representatives failed to act in clients’ best interests, providing inappropriate advice and attempting to contract out of personal advice obligations.
• General Non-Compliance: UGC breached multiple obligations, including providing reasonable financial services, managing conflicts of interest, and complying with financial laws.

ASIC Cancels United Global Capital License, Bans Director

Director Banned

ASIC decided to ban Hewish based on his role as a responsible manager and key person at UGC. The regulator cited his lack of competence, cavalier attitude towards management, and a pervasive culture of non-compliance within the company.

Appeal and Administration

Hewish and UGC appealed ASIC’s decision to the Administrative Appeals Tribunal (AAT). The AAT initially delayed the appeal process by imposing interim publication restrictions, which were lifted on 25 July 2024.

UGC entered voluntary administration on 5 July 2024, with David Stimpson and Hugh Armenis of SV Partners appointed administrators. The Federal Court has since issued interim orders freezing the assets of UGC and related entities, including Global Capital Property Fund Limited (GCPF), with further proceedings scheduled for 6 August 2024.

Client Advisory

ASIC has advised UGC clients to seek independent advice and consider lodging complaints with the Australian Financial Complaints Authority (AFCA) if they have concerns about the advice received. Despite the cancellation of UGC’s license, it remains an AFCA member until May 2025 and retains client insurance coverage.

ASIC’s investigation into UGC, Hewish, and associated entities is ongoing. The regulator continues to address this case’s ramifications and ensure investors’ protection.

For more details and updates on this case, clients and stakeholders are encouraged to follow ASIC’s announcements and seek professional advice tailored to their circumstances.

Disclaimer: This article summarizes recent developments and should not be considered legal or financial advice.

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