The corporate regulator has cancelled the Australian Financial Services (AFS) licence of Sydney-based firm Capital Guard AU Pty Ltd (Capital Guard) over the sale of a fake $100,000 bond purporting to have been issued by financial giant Macquarie Capital.
The Australian Securities and Investments Commission (ASIC) said Capital Guard “had contravened its obligations as an AFS licensee, based on findings including misleading or deceptive conduct, dishonest conduct in connection with its financial services business, and failures in compliance, supervision, and resourcing.”
ASIC said the group had created a fake bond prospectus for a Macquarie Bank bond that did not exist, which was used to solicit investor funds.
Capital Guard then encouraged and facilitated client investment into the fake bond, which had been marketed on its website, including arranging payment and documentation for transactions relating to the fake bond, ASIC said.
ASIC said the firm “obtained at least $100,000 from investors for a bond that did not exist.”
Macquarie itself warned customers of fake bond investments in May last year, saying “scammers posing as representatives of Big Start Pty Ltd, AAA Private Wealth Advisers, and Capital Guard are attempting to solicit investments in fake bank branded bonds, including fake Macquarie-branded bonds.”
ASIC said its investigation into Capital Guard remains ongoing as it looks at broader failings like its failure to notify ASIC of changes in control and to maintain proper accounts and oversight. It is also accused of providing false documents to its auditor.
“ASIC further considers that the conduct outlined indicates a risk of ongoing non-compliance and misconduct if the licence were to remain in force,” the commission said.
ASIC said Capital Guard has held an AFS licence since 2017, but the business was sold to current management in 2024.
The company has been contacted for comment.
ASIC said its action against Capital Guard reflects its ongoing focus on disrupting investment scams, particularly those exploiting trusted brands or purporting to offer fixed-income or bond products to retail investors.
The watchdog said Capital Guard’s licence will continue to operate in a limited form to the extent it is needed to ensure the group remains a member of the Australian Financial Complaints Authority (AFCA) scheme.
And to the “extent it requires Capital Guard to have arrangements for compensating retail clients including the holding of professional indemnity insurance cover.”
Capital Guard listed its address at a Sydney accounting firm, but a spokesperson for the firm stated that Capital Guard was never a client. The firm is preparing to issue a legal demand to the Capital Guard’s director to remove the address.
Colin Kruger is a senior business reporter for the Sydney Morning Herald and The Age.Connect via email.