It is well documented that decision caused heartache and grief for hundreds of Illawarra investors caught up in the biggest superannuation fraud this country has ever seen.

Mr Tarrant found himself on the front page of newspapers across the nation and banned by ASIC for seven years for receiving and not disclosing a marketing allowance to recommend the disastrous fund.

His reputation took a battering. So did his business.

After five years, Mr Tarrant breaks his silence and reveals he is taking his fight with ASIC to the Federal Court. CYDONEE MARDON reports

Ross Tarrant was the talk of the town, the man accused of pushing his clients into a dodgy superannuation scheme, then sitting pretty with hundreds of thousands of dollars in kickbacks.

His name was mud as he became the human face of the country’s biggest superannuation fraud, a shonky, reckless adviser who pocketed ‘‘secret commissions’’ while 220 of his clients lost their savings.

According to the official story, Mr Tarrant ignored the warning signs, directing clients’ hard-earned savings into a ‘‘high-risk’’ scheme when he should have known better.

No-one spelled it out as bluntly as Throsby MP Stephen Jones who, under parliamentary privilege, said Tarrant ‘‘took the good people of the Illawarra for a ride’’.

 A closer look reveals Mr Tarrant did not line his pockets at the expense of his unsuspecting clients who invested in the Astarra Strategic Fund.

He too had poured money into the Trio Capital managed scheme and advised close friends and family to do the same.

A Parliamentary Joint Committee inquiry found Mr Tarrant could not have known about the fraud, while a NSW Supreme Court judge noted ‘‘even a competent and responsible financial adviser would have heard no warning bells sound for the scheme’’.

But Mr Tarrant’s reputation went down the gurgler as soon as ASIC investigators came banging on his door.

He found himself on the cover of newspapers, banned for seven years from acting as a financial adviser for not disclosing a marketing allowance from the fund manager in October 2008.

‘‘To say that I was influenced to invest in Astarra by the marketing allowance is uninformed rubbish,’’ Mr Tarrant said.

‘‘To say the marketing allowance was not disclosed is uninformed rubbish.’’

Mr Tarrant only ‘‘agreed to and accepted’’ the allowance six months after he recommended Astarra and by then the vast majority of his clients had already accepted his advice.

‘‘The marketing allowance did not incentivise my decision as it was only discussed six months after our interviewing commenced when market conditions were at their lowest levels,’’ he said this week.

‘‘You can’t have an incentive in reverse.’’

Mr Tarrant said the payment was offered as a form of compensation, to reimburse business costs incurred as part of the administration process of investing in Astarra.

The five-month process involved up to 24 staff members working a total 893 hours of paid overtime in the depths of the Global Financial Crisis as he was ‘‘forced to change investment platforms’’.

Once Mr Tarrant had been reimbursed for the administration costs, he disclosed the marketing allowance to all clients.

‘‘The marketing allowance kept 70 staff employed across my tax and accounting, financial planning and legal practices during the biggest crisis in 100 years and ensured service levels were maintained and panic selling was avoided at all cost,’’ Mr Tarrant said.

‘‘As each month passed during the global financial crisis I personally contributed $100,000 to the business to keep everyone employed.”

Mr Tarrant says the marketing allowance enabled his firm to be compensated for the ‘‘enormous costs of the administration process’’ without existing clients being charged a cent. ‘‘That’s a point seemingly lost in all the hype.’’

He says the marketing allowance represented no more than 12 per cent of total business income.

After 14 months of the GFC ‘‘with nowhere else to turn’’, he entered into commercial arrangements with the fund manager  ‘‘to keep everyone employed’’ and avoid redundancies which were becoming widespread in the industry.

Mr Tarrant points out that his staff have never been paid bonuses, commissions or incentive-based remuneration and his firm was therefore hit harder than the majority of the industry by the GFC.

He insists the only thing he is ‘‘guilty of’’ is caring about staff and investors and ‘‘doing something about it in a freefalling market’’.

 Mr Tarrant says the misinformation about the allowance was typical of the treatment he was copping from ASIC, politicians and the media.

‘‘No-one bothered to look at the background to find out the truth or speak to me,’’ he said.

Initially ASIC accused him of receiving $840,000 in illegal secret commissions.

The “secret commissions’’ wording changed to receiving the money in undisclosed payments.

Mr Tarrant took his case to the Administrative Appeals Tribunal (AAT) which affirmed ASIC’s seven-year ban.

The tribunal found Mr Tarrant had failed to disclose marketing allowance payments from Astarra to 20 clients - worth a total of $40,075. ‘‘It’s a far cry from the $840,000 first reported,’’ he says.

Yet ASIC released a press release on January 8, 2014 – three weeks after the tribunal’s decision – stating Mr Tarrant received and failed to disclose that he received more than $1.1 million in marketing allowances.

Mr Tarrant wants to set the record straight. For the period of ASIC’s investigation, he says he prepared 1946 advice documents with 518 Statements of Advice relating to recommendations on investing in Astarra.

ASIC at the height of its case alleged 20 non-disclosures.

Mr Tarrant is contesting that figure in upcoming court proceedings – he argues that non-disclosure occurred with regard to six clients for a total of $3366.

‘‘Of the 14 clients in question, ASIC is plainly wrong on one client with full disclosure made and the other 13 clients were disclosed to at a later date in any event,’’ he says.

‘‘The remaining six were due to staff error brought about by the pressure of the global financial crisis.’’

Mr Tarrant says ASIC’s press release in January was ‘‘nothing more than a political statement rather than a true representation of the AAT’s findings’’.

Furious, he contacted ASIC and requested they ‘‘retract their statement’’ to allay investor fears and ‘‘protect the reputation of the industry in the midst of the biggest fraud in Australia’s superannuation history’’.

He says an ASIC officer’s response was ‘‘mate, that’s not what ASIC does’’.

He disagrees, pointing out that the ASIC Act is charged with exercising its powers to ‘‘promote the confident and informed participation of investors and consumers in the financial system’’.

Dissatisfied with ASICs response, Mr Tarrant went to the Sydney headquarters of Financial Planning Australia (FPA) and requested a mini-audit be done at his Wollongong office, the results made public, ‘‘to quell hysteria and protect the reputation of the industry’’.

The FPA declined, saying “we are monitoring the situation but are not concerned at this stage” , Mr Tarrant says.

Subsequently his FPA membership was revoked ‘‘with no explanation, purely on the basis that ASIC had banned him’’.

“This is how the FPA treats a 20-year member with CFP certification who had never before had any trouble.’’

Five years on and Mr Tarrant is still furious about the ‘‘inaccurate, false and misleading’’ statements that have kept the truth of the Trio debacle hidden.

His sister, brothers-in-law, his own children, he himself, were among the 220 investors who poured $25million into the fraudulent fund. Their money is gone and unlikely to be recovered.

But after countless sleepless nights and years spent seething about what went wrong, Mr Tarrant is sure of one thing – his financial advice was sound, given there were 45 similar funds which also had positive returns during the GFC.

‘‘The Astarra Strategic Fund was a flight to safety in that 60 to 100 per cent of the fund was in non-stock market related fixed interest contracts as detailed in the PDS and research reports,’’ he said.

‘‘The real issue here is for clients to reconstruct the portfolio as though the fraud did not occur and then reassess my advice.

‘‘Advisers cannot be blamed for fraud and our clients’ geared positions withstood the global financial crisis with no margin calls prior to the fraud due to cash and liquidity positions built into the portfolios and designed to withstand a 55 per cent drop in the market without client contribution,’’ Mr Tarrant said.

‘‘Margin calls only eventuated as a result of the freeze placed on Astarra by ASIC which occurred seven months after the end of the GFC and after enormous gains on the market.’’

In his first interview with the Mercury since ASIC investigators called on him in 2009,  Mr Tarrant said there were no warning signs, nothing he missed that should have alerted him to Australia’s biggest superannuation fraud.

‘‘I can’t look back, and I’ve gone over it a million times in my mind, and I’ve had legal firms in Sydney tell me, there’s nothing here that should have been seen.

‘‘There’s nothing here that I look back at and say ‘idiot why didn’t you see that’.’’

Mr Tarrant was led to Astarra by Canadian-born Shawn Richard, an ‘‘unassuming, affable kind of bloke’’ he met at a 2006 conference.

Richard made little time to mingle with conference participants, always in a hurry to get back to his hotel room to his laptop and mobile phone.

‘‘It doesn’t matter what he was like though,’’ Mr Tarrant insists.

‘‘It comes back to the numbers, the research. It doesn’t matter whether you like him or don’t like him.

‘‘It was the features of the product, it fitted into the portfolio, and to the extreme market conditions at the time, that’s what was relevant.’’

Richard, a founding Trio director, was one of two men jailed over the disappearance of $176million in superannuation savings. Convicted on two charges of dishonest conduct, he was sentenced to three years and nine months in jail. He served the minimum term of two years and six months and walked free early this year.

Richard was given a 25 per cent discount on his sentence for contrition including pleading guilty at the first available opportunity, and a further 12.5 per cent reduction for undisclosed assistance in another matter.

A 32-page document, held by ASIC since 2010 but released for the first time this year under the Freedom of Information Act, reveals the extent of Richard’s knowledge and involvement in the fraud.

Up until a few months ago, Mr Tarrant believed ASIC and Richard’s story that Richard was a mere foot soldier, marching to the tune of untouched ‘‘mastermind’’ Jack Flader.

But after getting his hands on that 32-page Statement of Facts, Mr Tarrant’s world again turned upside down.

The statement – signed by Shawn Richard –  ‘‘implicates him entirely as being involved in the fraud from the beginning and at every stage,’’ Mr Tarrant says. 

‘‘I had supported Shawn through all of this … I thought he was a foot soldier at best and duped like the rest of us. If he wasn’t, he should have been jailed for 100 years.

‘‘I was saying ‘It wasn’t within his character to be involved with anything underhanded, no he wasn’t involved, he couldn’t have been involved, or they would have put him away for ever’.

‘‘Now we get this 32-page statement back and my whole world changed. It’s still hard to believe.’’

Ross Tarrant has produced a book for his clients, raising  questions about Richard and the extent of his involvement.

He levels blame at ASIC, APRA and politicians who he says made a scapegoat out of him while letting the big fish slip away.

Mr Tarrant still bristles at comments in 2011 by Mr Jones, his local member, that he ‘‘pushed unsuspecting clients into investments they didn’t understand’’.

‘’It’s all very well to say unsuspecting clients with the benefit of hindsight,’’ Mr Tarrant says.

‘‘You could also say unsuspecting adviser, unsuspecting auditors, unsuspecting directors, unsuspecting APRA. To say the clients are unsuspecting, we were all unsuspecting.’’

Mr Tarrant said Mr Jones never once contacted him about the debacle despite heavily criticising him under parliamentary privilege and referring to him as a ‘‘clown’’ with ‘‘zero credibility’’.

‘‘If the ignorant member had done any research at all he would have seen that the Astarra Strategic Fund was based on fixed interest investments and had it not been for the fraud, a worthwhile investment given the market conditions,’’ Mr Tarrant said.

‘‘It is now clear that ASIC and APRA could not detect any fraud or serious wrongdoing despite regular investigations,’’ he said.

‘‘The directors could find nothing wrong, nor could the auditors both internal and external, nor could the trustee or custodian, nor could the independent research houses.

‘‘But it’s only me that has copped the public flogging.’’

With four years left of his ban, Mr Tarrant is facing an uncertain future.

‘‘Business runs on word of mouth, reputation,’’ he says.

‘‘When you are a local … I’ve got clients caught up in this who are from my preschool days, my primary school, my high school, my former school teachers, people from when I played soccer, through cricket, every other cricket club in the region.

‘‘It’s your next door neighbours when you grew up, it’s your next door neighbours when you have your first house, second house, it’s everywhere where you go.

‘‘It’s your staff, it’s your staff’s family, it’s your kids, it’s your kid’s friends.

‘‘If you want to know who has lost money it’s my sister, my brother-in-law, my other brother-in-law, my daughter, my son, myself, that’s what happened.’’

Everything now hinges on Mr Tarrant’s appeal before a panel of three judges in the Full Federal Court.

Beyond that, he’s not sure.

‘‘I’m disgusted in the industry, I don’t know what I’ll do,’’ he said.

‘‘We’ve got some fiercely loyal clients and I wouldn’t like to say no I won’t be able to advise them in the future, but my appeal is more about the fact they shouldn’t say that I’m banned. They shouldn’t be saying that.

‘‘If ASIC had come to me from day one and tapped me on the shoulder and said your clients have lost money you need to sit on the sidelines for a while, I would have said ‘no problem how long’?

‘‘They would not have heard a whimper from me, but when they bring a whole lot of cock and bull against me, and they expect me to plead guilty to it, well I won’t.

‘‘And I won’t roll over and I won’t walk away.’’