ASIC Annouces Stop Order on the Fund with Misleading or Deceptive Marketing in Fawkner Property Ltd

The Australian Securities and Investments Commission (ASIC), Australia's financial regulatory authority, has made an interim stop order preventing Fawkner Property Ltd (Fawkner) from issuing or transferring interests in Private Property Trust No. 20 (marketed as Essential Services Trust No. 20) (the Fund), because of misleading or deceptive statements in the Fund's marketing and disclosure. Fawkner is the responsible entity of the Fund.

The order stops Fawkner from offering, issuing, selling or transferring interests in the Fund based on existing product disclosure statements (PDS).  The order is valid for 21 days unless revoked earlier.

ASIC considers that Fawkner misrepresented the performance risks of the fund in its marketing by:

• not adequately explaining how forecasted returns were calculated;

• not providing adequate warnings that the forecasted performance may not be achieved;

• using the term 'Covid-proof';

• inappropriately comparing the Fund to lower risk investments, benchmarks and indices; and

• using outdated performance numbers.

ASIC identified the misleading or deceptive statements in advertisements for the Fund, including Fawkner's website, and the PDS during a recent surveillance. 

ASIC may consider further regulatory action in relation to the Fund and Fawkner.