Brisbane financial adviser has assets frozen

ASIC has instigated "urgent proceedings" in the Federal Court against Brisbane financial adviser Sunny Prakash and his many associated companies.

The corporate regulator is investigating Prakash and his "related companies" - Principal Financial Services Pty Ltd, Self-Managed Super Pty Ltd, Provest Enterprises, and Super Funds Australia Pty Ltd ITF Principal Superannuation Fund - over concerns related to the misappropriation of client funds and unauthorised share trading.

The investigation, still in its early stages, is expected to take at least nine months.

As part of the probe, ASIC has conducted database searches, gathered information from financial institutions, and communicated with clients or their representatives who have provided information.

The Court ruled in favour of ASIC's urgent requests, stating that Prakash likely has access to the involved funds and may act to the detriment of aggrieved parties upon learning of the investigation.

The Court also noted that claims by aggrieved individuals, based on ASIC's current analysis, could significantly exceed the amounts held in their accounts, making any asset dissipation detrimental to their chances of recovery.

Although there is no current evidence suggesting Prakash is a flight risk, the severity of the alleged conduct, including possible criminal charges, and Prakash's pivotal role in ASIC's investigation, make urgent ex parte orders necessary in the public interest.

On 28 March 2023, the Court made orders preserving the assets of Prakash and the related companies and restrained him from leaving Australia.

On April 19, the parties' consented to a variation to carve outs to those asset preservations orders.

The matter is listed for a case management hearing on 16 May 2024.