ASIC rules against Spaceship for second time this year

Spaceship Capital director, chairman and responsible manager Paul Dortkamp will step down from his role after the Australian Securities Investments Commission (ASIC) banned him from performing his functions as an officer and responsible manager for two years. 

The ruling states that Dortkamp had “failed to understand all the financial services offered by Spaceship under its license” after the regulator found he failed to act on a fault in Spaceship’s onboarding system back in late 2018 and early 2019.  

Spaceship was founded in 2016 to offer investment and super options to Gen Z and millennial customers. The fintech has previously raised venture capital funding from prominent investors, including Airtree and Mike Cannon-Brookes investment fund Grok Ventures.

This week’s ruling from ASIC follows a decision by the corporate watchdog in January that resulted in Spaceship’s former CEO and director Paul Bennetts being banned from providing financial services for six years. ASIC had ruled after an investigation found Bennetts had dishonestly obtained his Australian Institute of Company Directors qualification.

In 2017, Spaceship also ran into trouble with ASIC after making false and misleading claims on its website about the company’s investment philosophy. Both Spaceship and a trustee of the fund, Tidswell Financial Services, paid a penalty of $12,600 each at the time. 

Spaceship’s latest charge relates to a fault in the onboarding system that affected a number of members, who were assigned to an incorrect superannuation product. According to a statement by Spaceship, this affected 55 of the company’s more than 35,000 members. 

ASIC noted that Dortkamp had “incorrectly concluded that the fault was not Spaceship’s responsibility, and therefore that it was not his responsibility to deal with it”. 

It added that as the responsible manager, this misunderstanding was an oversight on his part of the scope of Spaceship’s function. 

The ban has been recorded on the Banned and Disqualified Persons Register, although Dortkamp has the right to appeal the decision to the Administrative Appeals Tribunal.

Spaceship said in a statement that Dortkamp will be making such an appeal. It also added that in the light of Dortkamp’s resignation, Andrew Moore, CEO of Spaceship since May 2019, has been appointed as interim chairman, and the company is now looking for a permanent chair.

In the statement, Spaceship said that due to a software bug, “a number of new customers who sought to sign up to the Global Index investment option were inadvertently placed in the GrowthX investment option”.

This affected 55 members, who were then collectively compensated $10,507. The company said the bug was identified by Spaceship in October 2018, and following an internal investigation, the matter was reported to ASIC in February 2019. Spaceship had already fixed the bug as of October 2018.  

SmartCompany has contacted Spaceship for further comment.