ASIC Warns of Online Investment Scams After Shutting Down 95 Companies

The Australian Securities and Investments Commission (ASIC) has issued a warning to consumers regarding online investment websites and mobile applications. This follows the successful application by ASIC to wind up 95 companies, many of which the regulator suspects are linked to online investment and romance baiting scams, also known as "pig butchering" scams.

The Federal Court granted ASIC's application on the grounds that it was just and equitable to do so, after ASIC discovered that the majority of the companies had been incorporated using false information. Justice Stewart of the Court described the evidence for winding up each company as "overwhelming".

ASIC believes that many of these companies were associated with websites and apps used to facilitate suspected scam activity. These platforms allegedly tricked consumers into investing in fraudulent schemes involving foreign exchange, digital assets, or commodities trading. The regulator has taken steps to have numerous related websites and apps taken down.

ASIC Deputy Chair Sarah Court emphasized the deceptive tactics employed by scammers, stating, "ASIC believes many of these companies were set up with the aim of providing a veneer of credibility by purporting to provide genuine services. This action has shut these companies down and protects consumers from entities with no proper management or control, including some that were associated with potentially fraudulent activity."

Ms. Court further warned about the evolving nature of these scams, noting, "Scammers will use every tool they can think of to steal people's money and personal information. ASIC takes action to frustrate their efforts… However, these scams are like hydras: you shut down one and two more take its place. That's why we're warning consumers that the threat of scams and identity fraud remains high. We remind consumers to be vigilant."

Catherine Conneely and Thomas Birch of Cor Cordis have been appointed as joint liquidators of the 95 companies. ASIC has provided a link to a list of the affected companies​.