Capital Alternatives' spruiker Geoff Woodcock cops ASIC ban

ASIC has banned Geoffrey Woodcock of Auckland, New Zealand, from providing financial services for a period of four years.

Between November 2011 and October 2013, Geoff Woodcock was the founder and manager of Capital Alternatives Pty Ltd and a director of Velvet Assets Pty Ltd. Both of those companies promoted alternative investments in Australia.

However, Capital Alternatives, Velvet Assets and Mr Woodcock were not holders of Australian financial services (AFS) licences. They were also not authorised representatives of a licensee.

Following an investigation, ASIC found:

• a number of the alternative investments promoted by Capital Alternatives and Velvet Assets were financial products and as such the companies were required to hold an AFS licence;
• as a consequence, Capital Alternatives and Velvet Assets carried on a financial services business without holding an AFS licence and so contravened s911A of the Corporations Act;
• Mr Woodcock was involved in this contravention by the companies; and
• Mr Woodcock personally induced clients to invest by failing to disclose that around 40-45 per cent of the money invested would be retained as commission.

Commissioner Greg Tanzer said, 'The Australian financial services licensing regime provides safeguards. Consumers should not invest with a person or entity in Australia unless they are authorised by, or hold, an AFS licence.'

Mr Woodcock has the right to appeal to the Administrative Appeals Tribunal (AAT) for a review of ASIC's decision.

There has been action elsewhere too against Capital Alternatives and other firms. 

In February 2014, the UK’s Financial Conduct Authority won a case in the High Court against two investment schemes promoted by Capital Alternatives and other firms.

The FCA accused the firms of “promoting and/or operating collective investment schemes (CISs) in the UK illegally and without our authorisation”.

Judge Nicolas Strauss QC ruled that the schemes were collective investment schemes. 

The fact that the investment schemes were not authorised by the FCA means that they were operating illegally.

The FCA took out the case against the companies and individuals in July 2013.

The case focussed on two investment schemes: African Land (also known as Agri Capital) which offers investments in rice farm harvests in Sierra Leone, and is operated by African Land Limited and Reforestation Projects (also known as Capital Carbon Credits) which offers investments in carbon credits generated from land in Sierra Leone, Brazil and Australia. It is operated by Reforestation Projects Limited.

To sell the land, Capital Alternatives was advertising “Projected returns up to 175 percent in over five years.”