ASIC has provided an update on the work relating to the collapse of Trio Capital.
Enforcement
ASIC has taken enforcement action on Trio against a range of gatekeepers. This includes directors of Trio, its investment manager, various financial planners who recommended Trio and Trio’s auditor.
As a result of ASIC’s continuing Trio investigations more than 10 individuals have either:
- been jailed. Trio investment manager Shawn Richard has been jailed for 3 years and nine months with a minimum of 2½ years to serve
- been banned by ASIC from providing financial services
- ben prevented from managing corporations
- been prevented from acting as a registered auditor
- agreed to remove themselves from the financial services industry.
These individuals have either been jailed, banned by ASIC from providing financial services, disqualified from managing corporations or have agreed to remove themselves from participating in the financial services industry for a combined total of more than 50 years.
ASIC inquiries into Trio are continuing.
ARP Growth Fund
ASIC is investigating the conduct of persons relating to the failure of the ARP Growth Fund, a fund associated with Trio. ASIC’s investigations indicate the reasons for ARP Growth Fund’s losses appear different from those of the Astarra Strategic Fund, another Trio fund.
To date, the documents in ASIC’s possession show the ARP Growth Fund failed following substantial investment in an offshore fund that had exposure to collateralised, leveraged credit default swap agreements. The investments failed during the global financial crisis.
Financial planners
ASIC has conducted a specific and detailed investigation into the advice by financial planners to investors in Trio Capital using a risk-based approach. We have taken regulatory action against a number of financial planners where there have been breaches of the law. Some of these actions are ongoing.
Trio liquidator
ASIC is providing funding under the Assetless Administration Fund to the Trio liquidator to enable investigation of the Trio collapse.
Forward plan
In 2010, ASIC also set out a forward plan to improve the conduct of gatekeepers in this area. ASIC has:
- increased the financial requirements that apply to managed investment schemes
- conducted regulatory reviews of the custodian industry. We will soon issue a report that highlights the need for clear disclosure about the role of custodians
- reviewed compliance plan arrangements for managed investment schemes.
ASIC is also strengthening the regulatory requirements applying to hedge funds and research houses.