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ASIC tells Adelaide man to stop scheme
July 19, 2005 - 6:19PM

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An Adelaide man has been ordered to stop operating an investment scheme which the corporate regulator believes is unregistered and illegal.

The Australian Securities and Investments Commission (ASIC) obtained the orders in the Federal Court of Australia as part of its investigation into Guiseppe Antonio Mercorella.

ASIC alleges that, over three years, Mr Mercorella received about $236 million in loans by offering investors interest rates of between three per cent and six per cent per month.

ASIC estimated more than $56 million of these loans were outstanding, with individual investors owed amounts of between $50,000 and $8 million.

The interim orders stop Mr Mercorella from promoting or operating the managed investment scheme and from receiving any more funds in connection with the scheme.

Mr Mercorella has agreed to the orders, which also prevent him from selling property related to the scheme.

He has agreed not to leave Australia without consent.

ASIC's executive director of enforcement Jan Redfern said the orders would stop more people getting caught up in the scheme.

"ASIC took action to protect investors and to prevent even more people giving Mr Mercorella their money to invest in what we believe is an unregistered and illegal investment scheme," she said.

ASIC will now apply in court to appoint Bruce Carter of Ferrier Hodgson as receiver to the assets of Mr Mercorella and the scheme.

It will also seek to appoint a liquidator to Seabay Investments Pty Ltd, which it believes breached the Corporations Act through its involvement in the scheme.

The matter will return to court on August 6.

© 2005 AAP