Corporate watchdog ASIC has obtained sequestration orders, declaring social media financial influencer Tyson Scholz bankrupt over unpaid court costs.
The Federal Court of Australia has granted sequestration orders against Scholz, pushing the finfluencer into bankruptcy. This development follows Scholz’s failure to settle court-ordered costs stemming from a previous legal battle initiated by ASIC in December 2021.
ASIC, which earlier this week officially revoked the Australian financial services (AFS) licence of NextGen Financial Group, has submitted an application to the Australian Financial Security Authority for the appointment of trustees to manage Scholz’s assets.
Scholz found himself in legal hot water in December 2022 when the court determined he had operated a financial services business from March 2020 to November 2021 without the requisite AFS licence, violating section 911A of the Corporations Act.
Subsequent to this finding, in April 2023, the Federal Court imposed permanent injunctions against Scholz, barring him from engaging in financial services activities in Australia in breach of the Corporations Act.
Justice Kylie Downes ordered Scholz to cover the legal costs incurred by ASIC, which were later quantified by Judicial Registrar Allaway in June as amounting to $456,296.64.
Despite being served with a bankruptcy notice in July, Scholz did not fulfill the payment obligations, leading ASIC to file a creditor’s petition in the Federal Court in October 2023.
Under the Corporations Act, Scholz’s bankruptcy status restricts the finfluencer from managing a corporation (without leave of the court), acting in various administrative and liquidation roles, or being associated with financial market licensees without court permission.
Moreover, his bankruptcy opens the door for ASIC to take further regulatory actions, such as cancelling or suspending his financial services licence, imposing bans on providing financial services, and revoking his liquidator registration.
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