‘ASX Wolf’ seeks to quash ASIC lawsuit evidence – The Australian Financial Review

ASIC’s amended concise statement also contains fresh claims that he wielded his Instagram account, which had 21,900 followers, to generate cash, including from a $500 tipping service.

“From at least early 2020, the defendant used his Instagram account to make posts and stories, in which he made recommendations and gave statements of opinion that were intended to influence people viewi…….

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ASIC’s amended concise statement also contains fresh claims that he wielded his Instagram account, which had 21,900 followers, to generate cash, including from a $500 tipping service.

“From at least early 2020, the defendant used his Instagram account to make posts and stories, in which he made recommendations and gave statements of opinion that were intended to influence people viewing his Instagram posts and stories to purchase shares in certain companies listed on the ASX,” ASIC alleged.

“From time to time, the defendant charged individuals $500 for a “tip” (or a recommendation and/or statement of opinion), via his Instagram account, intended to influence those people to purchase certain shares.”

Mr Scholz has previously denied having conducted such a tipping activity. An image – claiming he was seeking $500 for tips into a company he had researched for “five months” – had circulated on social media and was filed in a separate civil dispute, but Mr Scholz had told The Australian Financial Review that was something he never did and came from a fake account.

ASIC’s case maintains that from at least April 2020, Mr Scholz was charging fees for “Stage 1” seminars where he “made recommendations and gave statements of opinion that were intended to influence those people to purchase certain shares”.

Those on the $1000-a-year “Stage 2” program – giving access to the “Black Wolf” Discord service – also were subject to recommendations or statements of opinion “intended to influence” share purchases, ASIC claimed.

Its filing listed chat channels including “RGI Only” and “KSS Only”; those are the ASX codes for micro-stocks Rotor-Gro International and Kleos Space.

ASIC is seeking court orders that prevent Mr Scholz from promoting a business providing recommendations about certain shares, and stopping him transferring any funds he has received from such business. The regulator maintains he was carrying on a financial services business by providing advice about shares on the ASX without holding the required Australian financial services licence.

The search warrant

Mr Scholz’s legal reply to the case, prepared by Horton Rhodes Legal, attempts to nullify ASIC’s lawsuit from the outset.

“The factual matters that are alleged in [ASIC’s] concise statement are based on information obtained by ASIC pursuant to a search warrant,” his reply stated.

“The defendant objects to ASIC’s reliance on that information for the purposes of the proceedings by reason that it is not authorised by s39H of the ASIC Act. Accordingly, this [defence response] is prepared on the basis that that information will not be admitted into evidence.”

That section of ASIC Act regulates where a police officer or other Commonwealth officer can provide ASIC with confiscated material. It includes provisions for swapping information if the material would be used for preventing or investigating breaches of offences or civil penalties, or of certain obligations.

Mr Scholz’s reply did not specify exactly how the material seized via the search warrant would be disallowed under the ASIC Act.

His reply also states that Mr Scholz denied having “ever conducted a business of providing financial services” or had ever contravened the Corporations Act.

He has previously told the Financial Review he avoided giving advice, and that instead his seminars were teaching basics such as opening a share trading account while the Discord service was for “a community [and is] not a tipping service”.

ASIC conducted search-warrant raids last year on Mr Scholz as part of a probe into suspected contraventions of trading in cannabis company Creso Pharma, of which he was a top 20 shareholder. Also raided was Creso’s corporate adviser EverBlu – whose head, Adam Blumenthal, was also chairman of the cannabis company.

Mr Blumenthal has since stood aside from Creso’s chairmanship and said he is co-operating with the investigation. Mr Scholz, who had previously been positive about Creso on social media, had also rejected any wrongdoing and said allegations surrounding his trading amounted to a witch hunt.

Source: https://www.afr.com/companies/media-and-marketing/asx-wolf-seeks-to-quash-asic-lawsuit-evidence-20220921-p5bjt0