Business

Sex clinic founder declared bankrupt

The head of a company that took advantage of men suffering from erectile dysfunction and premature ejaculation has been declared bankrupt.

A director of a company that took advantage of men suffering sexual dysfunction has been declared bankrupt after failing to pay the consumer watchdog's legal costs.

Jacov Vaisman is the former director of the Advanced Medical Institute (AMI) and NRM, the company that bought AMI and continued to operate the business.

The Australian Competition and Consumer Commission took AMI and Mr Vaisman to court in 2015 for taking advantage of vulnerable men suffering sexual dysfunction.

Federal Court Justice Anthony North found AMI engaged in unconscionable conduct in its sales pitch, which included telling men their penises would shrink if they didn't agree to treatments offered by the company.

The Federal Court on Tuesday granted an ACCC application for a sequestration order, after Mr Vaisman failed to pay the consumer watchdog's costs of more than $3.6 million.

The court also ordered the ACCC's costs be taxed and paid from Mr Vaisman's estate.

"We took action against Mr Vaisman and his former companies for their roles in unconscionable conduct and use of unfair contract terms in promoting or supplying male sexual dysfunction products to vulnerable consumers," ACCC commissioner Sarah Court said in a statement on Wednesday.

"The sequestration order granted yesterday shows our commitment to holding individuals accountable for failing to comply with court orders made against them in ACCC enforcement proceedings."

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