ASIC Shuts Down 95 Scam Companies in Major Crackdown on Fraud

The Australian Securities and Investments Commission (ASIC) has received Federal Court approval to shut down 95 companies involved in suspected investment scams. This follows a major investigation revealing how these businesses were used to trick people into investing in fake trading schemes.

The court found that the companies had been set up with false information and had no proper management. It ruled they should be closed on “just and equitable” grounds. Most of the companies had no real assets and were not conducting any genuine business.

Many were connected to websites and apps that appeared to offer trading in foreign exchange, cryptocurrencies, and commodities. In reality, these platforms were part of complex scams designed to steal money from investors.

One common tactic was a type of scam known as “Sha Zhu Pan”, or “pig butchering”. This method is often linked to organised crime groups in Southeast Asia. It involves scammers building personal relationships with victims online before convincing them to invest in fake trading accounts.

According to the court, the scammers would first gain the victims trust, often through social media. Over time, they would introduce the idea of investing. The trading platforms were manipulated to show fake profits, which encouraged victims to invest even more money. But when they tried to withdraw their funds, the money was gone.

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At the time of the court hearing, liquidators had already received around 1,500 claims from people who lost money. The total amount of claims was over AUD 35 million. It is unclear whether this figure includes both the original investments and the promised profits.

Only two of the companies had any significant assets, and none appeared to be active businesses. This suggested that the companies were created mainly to support the scams.

Justice Angus Stewart, who issued the courts ruling, described how victims were slowly manipulated until they were convinced to invest large amounts of money. He said the scam was like “fattening pigs for slaughter”.

ASIC‘s Deputy Chair, Sarah Court, said many of the companies were designed to look like real businesses, giving the scams a sense of credibility. She said ASIC’s action was necessary to protect the public from fake companies with no proper oversight.

However, Court warned that shutting down one scam is not the end of the problem. She compared the situation to a hydra - when one head is cut off, two more grow in its place.

Catherine Conneely and Thomas Birch from Cor Cordis have been appointed as joint liquidators. They will now oversee the process of closing down the companies and investigating any remaining assets.