Sydney, Australia, November 27, 2024 – The Federal Court has ordered Sasha Hopkins, the founder and director of The A Team Property Group, to pay a $1.25 million penalty and be disqualified from managing corporations for four years following proceedings initiated by the Australian Securities and Investments Commission (ASIC). The court also ordered that The A Team Property Group, five associated investment schemes, and related companies be wound up, with receivers appointed over their property and trusts.

The ruling, made on November 27, 2024, follows the Court’s findings that Mr. Hopkins and The A Team Property Group were involved in operating unregistered managed investment schemes, breaching section 601ED of the Corporations Act. Additionally, they were found guilty of carrying on a financial services business without an Australian Financial Services Licence (AFSL), violating section 911A of the Corporations Act.

Details of the Scheme and Investor Losses

Mr. Hopkins and his company marketed joint venture property developments on social media platforms, including Facebook, offering potential investors returns of 25% to 50% to be paid over a period of 12 to 26 months. Many investors, mostly inexperienced, were encouraged to establish self-managed superannuation funds (SMSFs) in order to invest in the schemes. The Court found that the majority of the 217 investors were misled into believing their investments were secure, with the expectation of substantial returns. The total investor losses in the schemes amounted to approximately $27 million.

This case marks a significant development, being the first time a court has imposed a pecuniary penalty against an individual for violating section 601ED. It is also the third-highest civil penalty ever imposed on an individual in an ASIC-initiated proceeding.

ASIC’s Response

ASIC Deputy Chair Sarah Court expressed concern about the growing prevalence of such high-risk property investment schemes, which often target vulnerable investors. She emphasized the risks associated with advising consumers to set up SMSFs to invest in unlicensed schemes, which ultimately resulted in major financial losses.

“ASIC recently identified unscrupulous property investment schemes as a priority area for enforcement. Mr. Hopkins and The A Team Property Group operated 11 unregistered managed investment schemes without a licence, leading to substantial investor losses,” Ms. Court stated.

In addition to the financial penalty, Mr. Hopkins was ordered to pay $50,000 towards ASIC’s legal costs.

Court’s Findings and Penalties

Justice Beach, in his judgment, stated that Mr. Hopkins played a central role in operating the schemes, including advising individuals to invest their personal savings through SMSFs. He described Mr. Hopkins as the founder, designer, and operator of the schemes, emphasizing the significant financial harm caused to investors.

The Court’s orders to wind up the associated companies and appoint receivers reflect the severity of the breaches and the need to protect investors and the integrity of the financial market.

Background

Mr. Hopkins, the sole shareholder, director, and company secretary of The A Team Property Group Pty Ltd, has been involved in 46 companies since late 2014. His business operated in multiple states, including Queensland, Victoria, New South Wales, and South Australia, where it developed real property and solicited investments for these projects.

Mr. Hopkins and his company promoted at least 11 different property investment opportunities online, offering both personal and SMSF-based investment options. In June 2022, ASIC obtained interim orders to freeze the assets of Mr. Hopkins and his related entities, and in July 2023, ASIC commenced civil proceedings against him for unlicensed conduct and operating the unregistered investment schemes.

Key Takeaways

• $1.25 million penalty and 4-year disqualification for Sasha Hopkins.
• Court found breaches of Corporations Act sections 601ED and 911A.
• $27 million in investor losses from unlicensed property investment schemes.
• First-ever civil penalty against an individual for contravening section 601ED.
• ASIC continues to target high-risk property investment schemes that mislead consumers.