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Review Question

Bella invested her $50,000 inheritance in a high-risk investment called SuperStorm Ltd after a brief meeting with a financial adviser George. George did not provide all required documents and misled Bella about the risks and past performance. SuperStorm has since gone into liquidation, losing Bella's investment. Bella wants advice on any legal rights she may have against George.

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48 views1 page

Review Question

Bella invested her $50,000 inheritance in a high-risk investment called SuperStorm Ltd after a brief meeting with a financial adviser George. George did not provide all required documents and misled Bella about the risks and past performance. SuperStorm has since gone into liquidation, losing Bella's investment. Bella wants advice on any legal rights she may have against George.

Uploaded by

roll_witit
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOC, PDF, TXT or read online on Scribd
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RMIT Classification: Trusted

PRACTICE QUESTION

George is a professional financial adviser and licensee, who has an office in Sydney
CBD. He also advertises in local newspaper and often conducts free seminars and
workshops about investment. Bella is an 18-year-old artist with aspirations to become a
rich investor by the time she turns 25. Bella is an orphan and lives with her 80-year-old
aunt. When Bella turned 18, her aunt gave $50,000 as inheritance.

Bella does not speak good English and have a basic understanding of English because
she recently migrated to Australia and she also has a special eye condition called
myopia (she is short-sighted) meaning that she always needs to wear glasses. When
she made an appointment to see George, she forgot to bring her glasses with her.
Bella told George that she needs to go back home to get her glasses, to which George
replied “Do not worry; I am here to help you”.

George spent about 20 minutes with her and persuaded Bella to invest in a high-risk
investment with allegedly profitable company called SuperStorm. George reassured
Bella that because she is very young, it is perfectly fine for her to invest in SuperStorm.
Even if she loses her investment, she has enough time to earn money again. George
also told her that many of his friends have become rich because of investing in
SuperStorm. He also mentioned that a movie star Jimmy M acquired this particular
financial product through him. George has never met Jimmy M.

Bella liked this idea because she dreamt of becoming rich very soon and she quickly
signed all necessary documents to invest $50,000 in SuperStorm Ltd. SuperStorm was
paying high commissions to everyone who was promoting their financial products and
George was one of them. During their appointment George forgot to give Bella a PDS
and only gave her a FSG and forwarded a SoA two weeks later.

SuperStorm is in hands of liquidators and Bella wants to hear your advice about
any legal rights she can have against George. Advise Bella by citing relevant
Australian law.

Discuss all the legal issues raised in this problem, including statutory and
common law issues.

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