FPC001B Economic and Legal Context for Financial Planning

Question 2 Finding the law (10 marks | Word limit: 600 words)

LO5: Explore the main sources of law and the regulatory structure of financial services law in Australia.

As outlined in Topic 3, accessing legislation and the law is a relevant skill for people working in financial services. For this question, use online legal resources to locate the following information in relation to this high-profile case.

Facts

MFS Ltd was a publicly listed company and was the parent company of the MFS Group. MFS Ltd collapsed in 2008 during the Global Financial Crisis (GFC) with substantial debts. Following the collapse, ASIC commenced civil penalty proceedings against a number of directors and officers of the group, including Mr Michael King in connection with large scale misuse of funds. The relevant entity at the heart of ASIC’s case was MFS Investment Management Pty Ltd (MFSIM). MFSIM was the Responsible Entity of the Premium Income Fund (PIF), the largest registered managed investment scheme in the MFS Group.

One of the key issues throughout the case was whether Mr King was an ‘Officer’ of the company. 

(a) Find section 9 of the Corporations Act, and provide:

(i) The definition of an ‘Officer’ under this Section. 

In your answer provide the full text of the heading of the section, and the online address (hyperlink) and date you viewed it. (1 mark)

The Supreme Court found that MFSIM, Mr King and other senior officers within the MFS group had contravened numerous provisions of the Corporations Act in connection with the misuse of MFSIM’s funds. 

The Court of Appeal overturned the ruling of the trial judge on the question of whether Mr King was an officer of MFSIM.

In AustLII, locate the 2019 Supreme Court of Queensland – Court of Appeal involving Michael King and The Australian Securities Investment Commission (ASIC) and provide the following details:

(ii) The full case citation and the orders made by the Court. (1 mark)

(iii) The key finding of the Court of Appeal on whether Mr King was an officer of MSFIM. (1 mark)

(b) ASIC then appealed this decision to the High Court of Australia. 

In AustLII, locate the 2020 High Court case involving The Australian Securities Investment Commission (ASIC) and Michael King and provide the following details:

(i) The full case citation and the orders made. (1 mark)

The Australian Securities and Investment Commission website at: <www.asic.gov.au> provides details of enforcements outcomes in a report that is released every 6 months. 

Please note: Links to ASIC documents or webpages may need to be copied and pasted into a browser address bar to work correctly.

The ASIC enforcement update January to June 2020, contained details regarding the MFS case.