Online Investors Advantage
Incorporated (OIA) promoted INVESTools website as part
of the ‘Financial Superstars’ seminars held in Brisbane, Sydney and
Melbourne in July 2004.

ASIC commenced proceedings against Online Investors
Advantage Incorporated (OIA), a USA-based company, in July 2004, in
relation to a series of workshops being promoted at ‘Financial
Superstars’ seminars, and in particular, OIA’s INVESTools website
service (www.investortoolbox.com).

The INVESTools website was promoted by OIA as a tool
to analyse data to identify whether specific US stocks should be bought
or sold.

Although OIA holds an Australian financial services
licence (AFSL), ASIC alleged that OIA was not licensed to sell its
INVESTools website service because the website service is a financial
product, or because it provides financial advice which OIA is not
authorised to provide under the conditions of its existing licence.

OIA argued that the INVESTools website was neither a financial product nor financial product advice.

In AUSTRALIAN SECURITIES AND INVESTMENTS COMMISSION v ONLINE TRADERS ADVANTAGE INCORPORATED the Supreme Court of Queensland rejected these arguments and found that the website was
a source of financial advice in respect of a particular financial
product or class of financial product within the meaning of the
Corporations Act.

However claims by ASIC of misleading and deceptive advice and failing to provide a Financial Services Guide and other alleged breaches were not upheld by the Court.