Corporate regulator ASIC has launched federal court proceedings against David Paul Hodgson and his companies, MacroLend and Great Southland, part of the Paladin Group, accusing them of unlicensed financial services and investor deception.
Since early January 2015, MacroLend allegedly raised more than $47.4 million from 169 investors without a proper licence. These funds were primarily invested in developing software products by Kradle Software, another Paladin Group company.
Similarly, Great Southland, a Belize-registered entity, is accused of unlawfully operating in Australia, gathering more than $60m from 89 investors, including 46 Australians, without registration or a financial services licence.
“ASIC is concerned that investments have been made in MacroLend and Great Southland by people close to Mr Hodgson without the legal protection provided by an Australian financial services licence,” said Sarah Court (pictured above), ASIC deputy chair, in a media release.
ASIC has also raised concerns about the misinformation provided to investors, particularly the exaggerated value of Kradle Software’s intangible assets, which were falsely claimed to be worth $1.02 billion. In reality, Kradle Software's balance sheet reported intangible assets valued at only $11,180.
“ASIC is also concerned about the alleged misrepresentations made by MacroLend, which we allege enticed investors using false information regarding its assets,” Court said.
ASIC seeks various court orders, including injunctions against the defendants and a ban on Hodgson from managing corporations for a determined period. This legal move follows Hodgson’s previous two-year ban in 2015 for failing to comply with financial service obligations while serving as director of Exalt Global Funds.
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