Question 9:

Melissa runs a financial planning business and has an office at her home in the Eastern suburbs. Kathy was a friend of Melissa's brother and he referred her to see Melissa. Kathy assumed that Melissa held an AFSL. However Melissa was not an authorised representative of a licenced holder nor did she have her own AFSL. Based on Melissa's advice Kathy invests $350,000 with her into a managed fund and direct shares. Kathy pays the money directly to Melissa trusting her to place the funds in the recommended investments. However Melissatook the money and used it for her own benefit.

Two months later, Kathy's through her friend Jenny, who is an ex-client of Melissa, told Kathy that Melissa is not licensed and has been banned from holding an AFSL by ASIC due to serious misconduct.

Kathy is now very worried about her investment and asks you for advice.

Required:

Advise Kathy of her legal rights and remedies under the Corporations Act 2001.