ASIC launches proceedings against Port Phillip Publishing

[Roswell Crash Survivor]

"ASIC launches proceedings against Port Phillip Publishing, proposes business be shut down"

Mumbrella Article: http://mumbrella.com.au/asic-launch...lishing-proposes-business-be-shut-down-558767

ASIC Statement: http://asic.gov.au/about-asic/news-...and-its-director-for-misleading-publications/

ASIC has commenced civil penalty proceedings in the Federal Court against Port Phillip Publishing Pty Ltd (PPP), an online financial publisher and Australian financial services licence (AFSL) holder, and its director and CEO, Kristan Sayce.

The proceeding concerns an article promoting an investment strategy which, according to PPP, consumers could adopt to “piggyback”, or mimic the performance of, the Australian Government’s Future Fund.

ASIC alleges that the article and the guide were misleading and deceptive because consumers could not mimic the performance of the Future Fund by adopting the promoted investment strategy, and that the testimonials contained in the article were false.

 

[bron.suchecki]

Given ASIC has been asleep at the wheel with regards to banking issues, hard to disagree with Kris that "the proposed penalty is to close our entire business. I am unaware of any instance where regulators have sought to shut down one of the big banks or funds management businesses when they have faced similar accusations”. Having said that, these claims, if true https://download.asic.gov.au/media/4974703/18-393mr-concise-statement-port-phillip-publishing.pdf don't look good for PPP:


(a) the Article did not represent the opinions of Mr Hibbard. Instead, it was substantially copied by one of PPP’s copywriters from an article published by an American related entity of PPP in the United States entitled “Americans Now Legally Piggybacking Canadian Social Security ... And Collecting Extra Monthly Checks from $400 to $4,700”;

(b) Mr Hibbard had no qualifications or experience in providing income or investment advice to retired investors or investors approaching retirement;

(c) Mr Hibbard had not conducted research in the order of 900 hours in relation to the Investment Strategy;

(d) Mr Hibbard had not connected with over 5,400 people who had generated income by adopting the Investment Strategy;

(e) PPP had no evidence that any of the alleged 5,400 investors referred to in the Article had generated income by adopting the Investment Strategy;

(f) the Investment Strategy had never previously been promoted to PPP’s readers or subscribers;

(g) adopting the Investment Strategy would not provide investors with regular monthly income because the Investment Strategy involved investment in the securities of exchange traded funds and listed entities which only paid dividends on a quarterly or half - yearly basis;

(h) adopting the Investment Strategy would have generated significantly lower returns than the returns promoted by the Article and the Guide;

(i) the Investment Strategy exposed an investor to a greater level of risk than that adopted by the Future Fund in September 2017 because the promoted Investment Strategy was more heavily weighted in favour of growth assets than defensive assets; and

(j) an investor could not mimic the performance of the Future Fund by adopting the Investment Strategy because : (1) it represents a static portfolio whereas the Future Fund ’s portfolio is dynamic and flexible ; (2) the Future Fund has access to strategies and markets that are unavailable to an individual investor ; (3) the Future Fund has access to global managers ; and (4) the Future Fund is highly diversified globally whereas the Investment Strategy is highly concentrated in Australian equities.

 

[bron.suchecki]

I think if the guide said "that our income expert would try to mimic or match the performance of the Future Fund. He would attempt to do that by recommending listed investments, which broadly correlated with the Future Fund’s asset allocation" as Kris claims then ASIC's points (f) to (j) don't stand, but the first five are a problem. I get that in the newsletter business they rework content from their wider network, but I don't get why take the risk of making statements like 900 hours and 5,400 investors, surely there were other copywriting angles that could be used.

 

[sodl]

PPP in the main is a very informative and useful service to many Australians . One of the very few independent services where that will call out the government at times and tell it how it is unlike the majority of investment advisors/services who are owned by big banks and do not even reveal they are owned by banks but will advise clients to invest in various bank investment products.
Fine and warn PPP and move on. Shutting them down seems over the top to me when comparing to penalties given out to big banks. Many of the players in big banks should be doing jail time but instead banks cop and pay a small fine as the penalty which is a joke.
There is possibly a bigger picture to this coming from higher up vindictive politicians.
I am familiar with Port Phillip Publishing. PPP possibly operates out of the same offices in Melbourne as Agora Financial Australia (Jim Rickards). Both companies have a very close association. If PPP is shut down then the same services prepaid for by subscribers (annual/life time) may just simply be transferred over to Agora.
They both have the same persons answering the phones.

PPP / Agora
96-98 Bridport Street, 108 Bridport Street,
Albert Park, VIC 3206 Albert Park, VIC 3206


ph 03 8657 3900 ph 03 8657 3902

 

[bron.suchecki]

From https://www.portphillippublishing.com.au/about/ "Port Phillip Publishing was established in 2005 as the Australian outpost of US publisher, Agora Inc" Agora also owns Stansberry Research. There is nothing stopping an Australian from signing up to a US newsletter I guess which runs Australian focused content however I think if you are specifically targeting Australians you need an AFS licence, which is why I guess Agora set up PPP in Australia.

 

[Bullion Baron]

From the comments on the mumbrella.com.au article (by Kris Sayce):

This really comes down to what I consider to be an excessive proposed penalty. I saw in the AFR yesterday, that Telstra was fined $10m last year for misleading 10,000 customers. I sincerely doubt if the ACCC asked for the revocation of Telstra’s communications licence, or to put Telstra out of business. We just want to make sure that the kind of resolutions and penalties faced by the smaller players in business are on the same relevant scale as those faced by bigger businesses. We don’t think that’s too much to ask.

I do empathise with this argument, but if PPP misled 833 customers, the equivalent fine may have been $833,000. Would the result have been much different (I'm presuming such a fine would have still marked the end of PPP)?

 

[bron.suchecki]

He says "the proposed penalty – which would see the business closed, would put 70 staff members out of work, and deny 50,000 subscribers advice". 70 staff, maybe some are part-time, with on-costs must be around $4-5m. 50,000 subscribers at say $200 pa average would be $10m revenue, so I think they could handle a $1m fine.

 

[Bullion Baron]

Quite possibly. I missed the "50,000" subscribers quote, only saw ASIC's comment about the offer being sent to 120,000, so had assumed a much lower subscriber base.

 

[sodl]

I subscribe to PPP newsletter and one of their services.
Unless I have missed something in a newsletter/s , there has been absolutely no mention at all from PPP of any breaches of service , ASIC launching proceedings , fines or proposed shutdowns. This thread is the first news I have heard of any issues.
I agree with Kris Sayce below comments and IMO the proposed excessive action by ASIC is a deliberate manipulative political decision to further erode peoples choices to obtain good honest independant financial/political advice/knowledge. All we get from our government (whether it be LNP or ALP) , RBA , media , investment advisers , real estate agents etc is continual disinformation , lies and deception and fake statistics re economic reality etc.
Keep us in aussies in the dark like a mushroom and feed us nothing but B/S.

Kris Sayce

“While I acknowledge that all instances of misleading and deceptive conduct should be investigated, I consider the proposed penalty beyond all reasonableness and excessive.”

Sayce said the proposed penalty – which would see the business closed, would put 70 staff members out of work, and deny 50,000 subscribers advice – was “extraordinary”.

“According to the charge, our alleged misleading and deceptive conduct covers the 833 people who subscribed to the service in the sales promotion, at a cost of $49 each. The total revenue Port Phillip Publishing generated from this campaign was just over $40,000. For this, the proposed penalty is to close our entire business. I am unaware of any instance where regulators have sought to shut down one of the big banks or funds management businesses when they have faced similar accusations,” he said.

 

[Lovey80]

Does anyone really think this is just ASIC doing their regular job? For years thousands of complaints were made about the big banks for actual criminal behaviour and ASIC did nothing. ASIC were so bad that we had to have a royal commission to bring only half of it to the light of day. Throughout that who period PPP has been critical of all governments, big banks and regulators.... They are being targeted for their political views more than anything.

 

[leo25]

Does anyone really think this is just ASIC doing their regular job?

They were too busy making their new logo.

ASIC experiences taxpayer backlash after spending $100k on ‘new’ logo

https://smallcaps.com.au/asic-experiences-taxpayer-backlash-after-spending-new-logo/

 

[silver kooka]

Why don't they investigate fraudsters like BIG UN who ripped off thousands of investors by lying about their earnings and got away with it Scot free?