A cold winter for the A Team – Court freezes funds and assets

Between 31 May 2022 and 7 June 2022, ASIC obtained three freezing orders against the Mr Hopkins and his companies. In doing so, the Federal Court of Australia ordered: 1) the Defendants’ assets be frozen; 2) the disclosure of existing assets to the Court; 3) the appointment of a receiver over digital assets; and 4) restriction of travel.

Background

Mr Hopkins is the founder of various unlicensed property investment companies, which promised retail investors significant returns on their investments.

The Defendants pitched lucrative investment schemes that involved the pooling of funds and development of properties all over Australia. The A Team primarily advertised on social media where it is described as ‘the fastest growing property mentoring company in Australia’.

Following the collapse of six companies linked to Mr Hopkins, investors are now pursuing up to $23.5 million of unpaid loans and interest. ASIC has alleged that the Defendant’s engaged in improper conduct, which resulted in the collapse of the companies and the subsequent loss of investor funds.

Freezing orders

In seeking freezing orders, ASIC highlighted the protection of investor funds as a key basis of their application. The application outlined ASIC’s concerns that the Defendants had allegedly:

• told investors they can expect guaranteed returns from the joint venture property developments of 25-50 per cent over the life of the development, which was typically forecast to be between 18 and 24 months;
• been carrying on a financial services business without a licence by providing personal advice to investors, which included advising investors to rollover their superannuation into self-managed superannuation funds and using the rolled over superannuation to invest in property developments;
• been operating an unregistered managed investment scheme that ought to have been registered; and
• misused investor funds, including converting investor funds into crypto assets.

Justice Beach ultimately made, over a series of weeks, orders of the nature that:

• the assets and funds, inclusive of property, of the Defendants are frozen;
• the disclosure of existing assets be made to the Court;
• the appointment of a receiver over the Defendants’ digital assets; and
• various restrictions of travel against Mr Hopkins.

Key takeaway

ASIC will continue to seek oppressive injunctive relief where it considers the protection of investor funds is required, including where the companies fall outside of the AFSL regime.

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Authored by:
Daniel Maroske, Director