ASIC has launched proceedings against online financial publisher Port Phillip Publishing and its CEO, Kristan Sayce, over articles which promoted an investment strategy allowing consumers to ‘piggyback’ the Australian government’s Future Fund.

Sayce, however, says the proposed penalties are “excessive” and “extraordinary” and are proportionately far larger than anything levied at the banks or fund managers after their misconduct.

‘Everyday Australians Now Legally “Piggybacking” the Future Fund…and collecting extra monthly income injections of $540 right up to $6,667’, which was published on Port Philip Publishing’s website and emailed to 120,000 subscribers between September 2017 and January 2018, and a guide entitled ‘Your Quick Start Guide to “Piggybacking” the Future Fund’, which was sent to 833 of the business’ subscribers, are both ‘misleading’ and deceptive’, ASIC has alleged.

Both articles were written by retirement investment expert, Matthew Hibbard. ASIC is also alleging Hibbard did not conduct 900 hours worth of research in relation to the strategy, as he claimed.

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Port Phillip Publishing’s article targeted at retirees and included client testimonials, which ASIC also alleges are false. The article and guide were misleading and deceptive as consumers could not mimic the performance of the Future Fund, ASIC said.

ASIC has requested the publication and Sayce pay a penalty for breaching consumer protection provisions of the Australian Securities and Investments Commission Act (2001) and the Corporations Act (2001), and for breaching its Australian Financial Services Licence obligations. ASIC also proposed Sayce be disqualified from managing corporations, and that Port Philip Publishing and Sayce be restrained from carrying on a financial services business.

In a statement provided to Mumbrella, Sayce said the publisher disagreed with the allegations, adding the proposed penalty was “beyond all reasonableness and excessive”.

“ASIC alleges that Port Phillip Publishing and I (as director and CEO) have misled and deceived investors as a result of a sales promotion that was in effect from around September to November 2017,” Sayce told Mumbrella.

“The premise of the sales promotion was that our income expert would try to mimic or match the performance of the Future Fund. He would attempt to do that by recommending listed investments, which broadly correlated with the Future Fund’s asset allocation.

“We disagree with the allegations, and will defend our position in the Federal Court.

“To be clear, Port Phillip Publishing does not manage money on behalf of investors, and our advisers are not permitted to invest in the stocks they recommend. Port Phillip Publishing only has a licence to provide general advice.

“While I acknowledge that all instances of misleading and deceptive conduct should be investigated, I consider the proposed penalty beyond all reasonableness and excessive.”

Sayce said the proposed penalty – which would see the business closed, would put 70 staff members out of work, and deny 50,000 subscribers advice – was “extraordinary”.

“According to the charge, our alleged misleading and deceptive conduct covers the 833 people who subscribed to the service in the sales promotion, at a cost of $49 each. The total revenue Port Phillip Publishing generated from this campaign was just over $40,000. For this, the proposed penalty is to close our entire business. I am unaware of any instance where regulators have sought to shut down one of the big banks or funds management businesses when they have faced similar accusations,” he said.

Port Phillip Publishing is the publisher of newsletters including The Australian Tribune, Markets & Money and Tech Insider, most of which are paid for by subscribers.

The first hearing is February 22.

ASIC’s latest proceedings come almost three years after Port Phillip Publishing was made to pay $21,600 for a misleading superannuation scare campaign.

Sayce’s full statement: