A key figure in the Trio Capital collapse has been banned from ever providing financial services by the Australian Securities and Investments Commission.
Former Astarra Asset Management (AAM) director Eugene Liu was permanently banned for failing to comply with financial services laws as part of ASIC's ongoing investigation into the 2009 collapse of Trio Capital which cost investors $176 million.
The watchdog found Mr Liu engaged in dishonest conduct and conduct which was misleading or likely to mislead in relation to $388,041 in payments he received as a reward for investing in certain funds and hiding where investment money would ultimately be placed.
According to ASIC, Mr Liu was a director and chief investment strategist of AAM from July 12, 2006, until it was placed into liquidation on December 22, 2009.
AAM was appointed by Trio Capital as the investment manager of the assets of Astarra Strategic Fund (ASF). ASF was a fund of hedge funds and its responsible entity was Trio.
Money was invested in ASF for 3½ years until September 2009 as a result of AAM's marketing and promotion of the fund.
In December 2009, ASF had reported assets of $125 million.
The collapse of Trio Capital that year was Australia's biggest superannuation fraud, with hundreds of mum-and-dad investors in the Illawarra hit with substantial losses.
More than 200 clients of former Wollongong financial planner Ross Tarrant lost a collective $23 million after he advised them to invest in ASF.
Wollongong financial planner Colin Warne also advised clients to invest in ASF and more than 60 of his clients lost their savings.
Former investment manager Shawn Richard is serving a 2½-year jail term for dishonestly receiving $1.3 million in investors' money.
ASIC's investigation found Mr Liu engaged in:
- Dishonest conduct with respect to incorrect statements made in the ASF Product Disclosure Statement.
- Dishonest conduct and conduct which was misleading or likely to mislead regarding a research report about ASF.
- Dishonest conduct in receiving more than $388,041 in payments outside his salary, as a reward for his involvement in the investment of ASF assets in certain funds.
- Dishonest conduct and conduct which was misleading or likely to mislead in hiding where ASF investment money would ultimately be placed.
ASIC chairman Greg Medcraft said: "Mr Liu's banning should act as a deterrent to all those in the industry. Australian investors should be confident and informed, and those individuals who do not promote these values when dealing with consumers have no place in the industry."
Mr Liu is appealing to the Administrative Appeals Tribunal for a review of ASIC's decision.
Investigations by ASIC into Trio are continuing.