Endeavour Securities (Australia) Ltd and Linchpin Capital Group Ltd previously operated managed investment schemes before they were placed into liquidation.

Both companies were found to have contravened multiple provisions of the Corporations Act by the Federal Court of Australia, following regulatory proceedings brought by ASIC.

The court found that Linchpin had operated an unlawful managed investment scheme, had operated without an AFSL and engaged in conduct likely to mislead or deceive.

The application filed by J & J Richards Super Pty Ltd is part of class action proceedings commenced earlier in August this year, brought by a group of investors who invested in two unregistered managed investment schemes operated by Linchpin and Endeavour, both called the Investport Income Opportunity Fund.

Several causes of action have been brought against the companies, including claims relating to their entry into loan transactions without any adequate security being obtained and funds being applied for purposes not consistent with the product disclosure statements or information memoranda.

It is also alleged that one of the companies engaged in misleading or deceptive conduct in relation to the manner in which investments were solicited from the investors.

The causes of action submitted by the applicants were based upon the same subject matter covered in the ASIC proceedings against Endeavor and Linchpin.

The court ordered that pursuant to section 471B of the Corporations Act 2001 (Cth), the applicant should be granted leave to commence and proceed with the proceedings against Endeavor and Linchpin.

The matter is listed for a case management hearing on 2 February 2021.