ASIC Imposes Bankruptcy Orders Against Tyson Scholz
Please note that we are not authorised to provide any investment advice. The content on this page is for information purposes only.
The Australian securities regulator, the Australian Securities and Investments Commission (ASIC), has secured bankruptcy orders against a social media finfluencer known as Tyson Robert Scholz.
The orders in question seek to ensure that Scholz becomes bankrupt. The ASIC filed the bankruptcy orders against the finfluencer after he failed to pay the costs previously ordered by a Federal Court in Australia.
We have successfully sought sequestration orders against finfluencer Tyson Scholz after he failed to pay costs ordered by the Federal Court. In April, the Court banned Mr Scholz from carrying on financial services and hosting online share trading groups https://t.co/gUx392lc4y pic.twitter.com/io9th3GJg6
— ASIC Media (@asicmedia) February 29, 2024
The tussle between the finfluencer and the ASIC started in 2021 after the regulator brought charges against the individual. However, the individual failed to pay the fines imposed by a court after he was found to have committed the offenses against him.
The ASIC has now filed with the Australian Financial Security Authority to have trustees take over the assets of Mr. Scholz. The bankruptcy filing will affect the influencer’s financial muscle and his ability to secure loans or credit.
ASIC Files Charges against Finfluencer
The case between the ASIC and the finfluencer started three years ago. In December 2022, a court found that Scholz violated the s911A section of the Corporations Act by operating a financial service business between March 2020 and November 2021.
The authorities claim that the individual operated the business without a license from the Australian financial market regulator.
As a result of the court case between the regulators and the finfluencer, the latter was slapped with permanent injunctions on April 13, 2023. The injunctions barred the finfluencer from conducting a financial service business in Australia after violating the Corporations Act.
The judge overseeing the case, Justice Downens, ordered that Scholz pay the costs of the proceedings filed by the ASIC. The amount that the court set for Scholz to pay was $456,296.64. The court arrived at this amount after assessing the relevant costs.
Despite the court’s order, Scholz failed to pay the amount in question. The Australian regulator was then forced to serve a Bankruptcy Notice on July 25, 2023, against Scholz. The ASIC has also filed a Creditor’s Petition with the Federal Court on October 18, 2023.
The courts heard the creditors’ petition on February 22, 2024, and later determined that Scholz was bankrupt. These bankruptcy orders will limit the financial activities that Scholz can engage in.
Bankruptcy Orders Against Scholz
The Corporations Act mandates that a person who has been deemed bankrupt refrain from engaging in various activities. For instance, the person cannot manage a corporation or be tasked as an administrator of a company. They cannot also operate as a liquidator of a company.
The Act also states that such a person should not interact with a firm holding a license as a clearing and settlement firm, market trader, or derivatives trading offering.
The ASIC also holds some authority over a person who has filed for bankruptcy. For instance, the regulator can cancel and suspend the Australian financial service license of the individual. The regulator can also place a banning order barring the person from offering financial services. The ASIC also holds the right to cancel the registration made by such a person as a liquidator.
