Court makes bankruptcy orders against ‘finfluencer’

ASIC has announced it successfully sought sequestration orders in the Federal Court of Australia against social media finfluencer Tyson Robert Scholz.

The effect of the orders, ASIC said, is to make Mr Scholz bankrupt.

ASIC sought the sequestrations orders after Mr Scholz failed to pay costs ordered by the Federal Court of Australia relating to proceedings brought by ASIC in December 2021.

The corporate regulator has now applied to the Australian Financial Security Authority to have trustees appointed over the assets of Mr Scholz.

The sequestration orders come after the Court found Mr Scholz had contravened s911A of the Corporations Act by carrying on a financial services business between March 2020 and November 2021, without an Australian financial services licence.

On 13 April 2023, the Federal Court made permanent injunctions against Mr Scholz prohibiting him from carrying on a financial services business in Australia in contravention of the Corporations Act. 

The court also ordered that Mr Scholz pay the costs of the proceedings brought by ASIC, followed by Judicial Registrar Allaway in June 2023 ordering that those costs be assessed and fixed on a lump sum basis in the amount of $456,296.64.

Following Mr Scholz’s failure to pay this amount, ASIC served a Bankruptcy Notice on 25 July 2023 on Mr Scholz and then filed a Creditor’s Petition in the Federal Court on 18 October 2023. The Petition was heard on 22 February 2024 and the Court made sequestration orders against Mr Scholz.

The result of the bankruptcy means that, under the Corporations Act, as an undischarged bankrupt Mr Scholz must not:

• manage a corporation (without leave of the court),
• act as an administrator of a company or of a deed of company arrangement,
• act as a liquidator of a company, or
• be involved with a clearing and settlement facility licensee, market licensee or derivative trade repository licensee.

Where a person becomes bankrupt, ASIC may also:

• cancel or suspend the person's Australian financial services licence,
• make a banning order prohibiting the person from providing financial services, and
• cancel the person's registration as a liquidator.