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11-133MR Former directors of Trio Capital prevented from working in financial services industry
ASIC today announced it has entered into enforceable undertakings (EUs) with former directors of Trio Capital Limited, Mr Rex Phillpott and Ms Natasha Beck.
Mr Phillpott was the Chief Executive Officer, director and secretary of Trio Capital from October 2005. He was also on the Risk and Compliance Committee. Mr Phillpott has agreed not to act as a director of any corporation or in any role within the financial services industry for 15 years.
Ms Beck was a non-executive director of Trio Capital from June 2008 and was a member of the investment committee of Trio Capital from September 2009. Ms Beck has agreed not to act in any role within the financial services industry for two years. She has also agreed not to act as a director of any corporations for two years with the exception of Rumi Holdings Pty Ltd, a company of which she is a director and the sole shareholder.
ASIC Chairman, Greg Medcraft, said:
‘The responsibilities of directors and officers of responsible entities are not diminished through outsourcing to investment managers. ASIC will hold these gatekeepers to account.
‘ASIC is concerned that both Mr Phillpott and Ms Beck failed in their duties as officers of the responsible entity of the Astarra Strategic Fund. ASIC believes it’s appropriate that they not be involved in the financial services industry or act as directors.’
The EUs follow the guilty plea of Mr Shawn Richard to two charges of dishonest conduct in relation to his role as a director of the investment manager of the Astarra Strategic Fund. Mr Richard is currently on bail awaiting sentence.
It also follows the EU from financial planner, Kilara Financial Solutions Pty Ltd, who recommended retail investors switch their superannuation holding into a fund of which Trio was the responsible entity. (See 11-122AD).
Trio Capital was formerly the trustee of five superannuation entities and the responsible entity for 25 managed investment schemes, including the Astarra Strategic Fund. The Astarra Strategic Fund was a fund of hedge funds which in December 2009 had reported assets of $125 million. Investors in the Astarra Strategic Fund included several superannuation trusts managed by Trio Capital as well as self-managed superannuation funds and direct investors.
The Astarra Strategic Fund invested in several questionable overseas hedge funds, mostly based in the Caribbean. ASIC commenced an investigation into Trio Capital in October 2009 over concerns about the legitimacy of its investments. Trio Capital was placed into administration on 16 December 2009. On 16 April 2010, the NSW Supreme Court ordered that the Astarra Strategic Fund be wound up. Since this time, the liquidator of Trio Capital has been unable to recover the vast majority of the investments made by the Astarra Strategic Fund.
Soon after ASIC commenced its investigation into Trio Capital, the Australian Prudential Regulation Authority (APRA) commenced a concurrent investigation. Both agencies have been cooperating with each other with respect to their investigations. Investigations by both agencies are continuing.