Disgraced Sydney businessman’s financial services companies face millions in penalties

Two companies linked with disgraced Sydney businessman David Sutton could be up for millions of dollars in fines after being charged with multiple offences.

Two financial services companies linked with a disgraced businessman face millions of dollars in fines after they were charged with multiple criminal offences for failing to lodge financial accounts.

David Sutton is the sole director of APC Securities (formerly McFaddens Securities) and co-director of Brava Capital (formerly Dayton Way Securities) — which have both been charged by the corporate regulator with three counts of failing to lodge a profit and loss statement and balance sheet, and three counts of failing to lodge an auditor’s report with the profit and loss statement and balance sheet.

The Australian Securities and Investments Commission alleged APC Securities and Brava Capital each failed to lodge their financial accounts and auditors report for each of the financial years from 30 June 2020 to 30 June 2022.

The maximum penalty for a body corporate for each failure to lodge a profit and loss statement and balance sheet and for each failure to lodge an auditor’s report is $1.3m. It means the companies face penalties of $7.8m.

Mr Sutton was permanently banned by ASIC in June from providing any financial services or controlling an entity that carries on a financial services business. He was also disqualified from managing corporations for five years.

The corporate regulator alleged the businessman invited Australian and overseas investors to put their money in unlisted shares through McFaddens Securities.

ASIC said Mr Sutton was not a “fit and proper” person to provide financial services in June after he lured investors into backing financial products through misleading and deceptive conduct.

“ASIC also found that Mr Sutton failed to exercise his power and discharge his duty with care and diligence in relation to his directorships of Paltar Petroleum Limited and Aus Streaming Limited,” a statement from June read.

“(Mr Sutton allegedly) engaged in conduct regarding a financial product that was misleading and deceptive or was likely to mislead and deceive.

“(He) did not take reasonable steps to ensure McFaddens’ representatives did not accept conflicted remuneration.”

As well, he was “involved in and facilitated misconduct” by Kristofer Ridgway, a senior adviser who worked for Shaw and Partners, and was also busted for allegedly investing client funds in bogus companies located in overseas tax havens.

Mr Ridgway was also permanently banned by ASIC from having any involvement in financial services, due to concerns he is “not adequately trained or competent to provide financial services, and is likely to contravene financial services law”.

“From 2015 to 2021, while an authorised representative of AFS licensee Shaw and Partners, Mr Ridgway recommended his clients invest in a range of international unlisted shares sourced by McFaddens Securities Pty Ltd,” the corporate regulator said in a statement.

“Mr Ridgway promoted international unlisted shares in pre-IPO companies including Steppes Alternative Asset Management, Trinus Impact Capital, and ASAF Critical Metals and its Australian subsidiary Aus Streaming Limited, which is now in liquidation.”

The matters concerning McFaddens Securities and Dayton Way Securities will return to court in November.