Professional Misconduct

Michael Grochowski

Address: Hampton, Melbourne, Victoria, Australia
Sex: Male
Occupation: Financial services
Date: 12 June 2012


ASIC has banned Mr Michael Grochowski of Hampton, Victoria, from providing financial services for four years in relation to his conduct as a director and officer of Sovereign MF Limited.

Mr Grochowski was a director and officer of Sovereign MF Limited from 12 May 2003 until his resignation in March 2010. Sovereign holds an Australian Financial Services (AFS) licence which authorises it to operate registered managed investment schemes, including The Sovereign Aged Care Property Fund, whose purpose is to invest retail clients’ money into real property investments. Investors in the fund are mainly mum and dad investors and self-managed superannuation funds.

ASIC found that Mr Grochowski failed to exercise the degree of care and diligence expected of a person in his position and responsible for operating a managed investment scheme. ASIC also found Mr Grochowski’s conduct as an officer of the company between December 2006 and March 2010 demonstrated a lack of understanding of the obligations imposed on AFS licensees.

Mr Grochowski was banned after ASIC found he did not comply with financial services laws by failing to:

  • ensure all the assets of the Fund were properly identified and registered as assets of the Fund, resulting in the loss of property assets of the Fund;

  • remedy defective disclosure documents for the Fund, such that the documents did not contain information about a material change to circumstances affecting property assets of the Fund;

  • provide members of the Fund with timely ongoing disclosure about material changes to circumstances affecting property assets of the Fund; and

  • lodge annual financial reports for Sovereign and the Fund.

In 2010, the directors of Sovereign, including Mr Grochowski, resigned and sold all shares in the company. As a result, new directors were appointed to Sovereign in March 2010.