ASIC just banned the Reffind IPO advisor for 3 years
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ASIC has banned Mark Hinsley, a director of Foster Stockbroking, from providing financial services for the next three years.
It follows an investigation into Hinsley’s conduct in connection to the 2015 IPO of Reffind (ASX: RFN), a cloud-based software company.
The investigation found that Hinsley engaged in “misleading and deceptive conduct” and breached his disclosure obligations under the Corporations Act.
Foster Stockbroking was the sole lead manager for the IPO, which was over-subscribed by a rate of almost 4:1.
When the offer was over-subscribed, ASIC’s investigation found that Foster’s directors scaled back their own holdings at a slower rate than other bids.
ASIC initially accepted an enforceable undertaking from Foster in November 2017, when its initial investigation found evidence of wrongdoing.
At the time of the IPO, ASIC alleged that Hinsley was the principal advisor to Reffind.
ASIC said its investigation found that Hinsley failed to disclose to Reffind that a proportion of shares had been allocated to nominee accounts controlled by Tinsley and other directors of Foster.
In addition, Hinsley authored a research report on the company which was misleading on the basis it “contained assumptions and statements that had no reasonable grounds”.
Reffind floated on the ASX in July 2015, just four months after the company launched.
The company listed at 30 cents per share and by October of that year rocketed to an all-time high of $1.93.
The downfall was nearly as swift, and by November 2016 Reffind was trading below 5 cents per share — a range it’s stayed in since.
In early 2018, Reffind attempted to revive its fortunes with a pivot to blockchain, purchasing an equity stake in the US-based Loyyal Corporation.
But by late last year, the company faced down angry investors at a fiery AGM, amid a stream of sudden departures in its director ranks.