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Ask Deborah Awyzio Your Own Question
Deborah Awyzio
Deborah Awyzio, Solicitor
Category: Australia Law
Satisfied Customers: 863
Experience:  Bachelor of Laws (QUT), BIT (QUT), Family Law Accredited Specialist, over 12 years experience
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I am an investor with CME Capital whose accounts were frozen

Customer Question

I am an investor with CME Capital whose accounts were frozen by ASIC, ostensibly to protect people like me. However, my investment with CME had matured and I had elected to redeem the money prior to the accounts being frozen. As far as I am aware the money is available, CME are willing to release it and the CEO asked the court 2 weeks ago for that to take place. What I would like advice on is whether or not there is a formal avenue by which I can petition ASIC to allow those funds to be released. The matter is due for hearing on Dec. 10 and I suspect ASIC will recommend that the company be placed in administration and I would like to avoid that process if possible.
As far as I am aware the impropriety of CME as stated by ASIC consists of breaches of ASIC regulations but not misappropriation of funds and I'm assured that there is enough cash to pay me out and enough assets to cover all investors' funds. The issue is, if CME's investments are not allowed to be managed these assets may be jeopardised.
Submitted: 1 year ago.
Category: Australia Law
Expert:  kmslaw replied 1 year ago.

Hello my name is***** am a solicitor in NSW who will help with your inquiry today. Were the funds you invested in CME Capital subject to a trust or did you just have shares in the company? Is the company just CME Capital PTy Ltd or does it have another name? Do you have a copy of the trust deed if there is one?

Customer: replied 1 year ago.
CME Capital was a fixed interest facility, not a trust. It is just CME Capital Pty Ltd.
Expert:  kmslaw replied 1 year ago.

How do you know that ASIC froze the accounts and that the money is available. Do you have a copy of the Court orders to that effect? If you can send me what paperwork you have, I can ascertain under what provision the accounts were frozen and what your rights are in respect of it.

Customer: replied 1 year ago.
The following is the only official communication I have. I have been in constant phone communication with Michael Petrou the CEO of CME. I am attempting to communicate with ASIC but have had no response. My investment with CME had expired and was about to be redeemed on the day that the accounts were frozen. Michael asked the court to allow redemption of expired investments but the court refused. There is another hearing on Dec 10. What I need to know is if there is a legal process by which I can retrieve my expired investment before an administrator is appointed, if in fact that is the direction this proceeds in.
Important Notice
We are no longer accepting new clients or new funds.
CME Capital Australia Pty Ltd has been operating a fixed interest rate facility in accordance with instructions and advice of its lawyers and other advisors. This includes the Professional Investor status that all clients have advised the company and agreed with in their applications.
Until as recent as a few days ago the company was unaware of any actions pending and had continued to benefit its clients with an on-time fixed term, fixed rate facility with an understanding that this would continue unhindered.
On the Friday, 13th November 2015 in the late afternoon ASIC lodged over 900 pages of documents and a summons to the company to be heard before the courts on Tuesday 17th November 2015 at 10:15 am. The company and its advisors attended with little time to consider the situation.
The company has had little time to consider the contents of the ASIC material but on a quick run through it denies any of the issues brought forward>.We were not in a position to oppose the ASIC application and on the basis of that material the Judge made orders that prevent us from managing the business.
CME Capital Australia Pty Ltd and its executives, employees and consultants have at all times been diligent in its management of affairs and especially in managing funds.
Our aim is to protect the assets and funds for the company and its valuable clients and will do all that is necessary to work with ASIC to ensure the very best outcomes possible for all clients.
It may be in several weeks or longer while we establish a regime in conjunction with ASIC and any court orders and we will ensure that we are diligent and transparent with all involved.
We have yesterday asked that ASIC agree that all interest payments proceed on time for all clients, ASIC opposed this request.
We have also asked that any end of term redemptions be permitted to be paid on time, ASIC opposed this request.
The orders of the court prevent us from making any payments to investors
We believe that given the opportunity to operate unhindered that CME Capital Australia Pty Ltd would be able to meet all payments of interest and end of term redemptions on time and in full.
It is heartbreaking to know that clients have just recently begun with our company and others were at the end of their term, we have always been prepared to make sure all payments were met on time, which we have successfully done since the very first client in 100% of cases.
We understand that ASIC would be concerned to preserve funds to ensure all clients are treated equally and fairly and we do not disagree with this idea and will work diligently for the very best outcome for all clients.
Without this intervention, the company at all times had made sure that it could meet its obligations to its clients as and when they would fall due which can be clarified by its past performance.
Other concerning aspects will be contested in court and we will vehemently defend our reputation and any allegation by ASIC in its notices which we find offensive, false and reprehensible.
We would have rather had meetings to overcome any issues and we have at all times been available and transparent in all our dealings to date.
It may be of note that ASIC previously asked for and were provided with all aspects of our business operational methods and had any and all questions answered in 2014 regarding our operational methods.
It now appears that ASIC started further investigation without our knowledge and have not sought to discuss concerns, instead they have launched these actions to our complete surprise especially since we had been through these issues a year earlier and had expected that all issues had been resolved.
We will be transparent and cooperative from this point forward with both ASIC and our clients to provide the very best outcomes for the clients and we will defend our company from these false, unfounded and misleading allegations.
Kind regards,
XXXXXXXX
Expert:  kmslaw replied 1 year ago.

Hello again. Sorry that this has taken so long but I wanted to dedicate full concentration to all that you wrote. It's my view that I really need to see the Court orders in order to advise. I've done a quick search in the Federal Court and Full Federal Court cases for this matter and I can't find it. Nor can I find it in the Federal Circuit Court judgments. Have you any clue whether this was heard in a Supreme Court and if so, which State or Territory court? I will continue to look through the Corporations Act 2001 now to see if there's another way to find out what was ordered and will come back to you but in the meantime can you please advise what you know in relation to this.

Expert:  kmslaw replied 1 year ago.

Hello again. There is a section of the Corporations Act that says that if you invested in CME Capital through someone who managed your account with CME Capital as a person with an Australian financial services licence, then ASIC can seek a Court order freezing that account in certain circumstances. See that provision here. However, if the orders were made during an application to wind up the company CME Capital Pty Ltd then it's possible that any order may have been made under another section which is this section here. So I really need to know the answer to the questions: did you invest through someone with an Australian financial services licence and did they manage the fixed interest investment for you? And if not, are there any other clues that this might have been a winding up application? The other thing I can do is to call the Federal Circuit Court to inquire as to whether this matter has actually been the subject of orders but they haven't been published for some reason and if I can get a copy, but I will have to offer you an additional service to know that.

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