Banned Wollongong financial adviser Ross Tarrant has accused Opposition Leader Bill Shorten of "driving the prosecution" against him and making him a scapegoat for the Trio Capital fraud.
In the Federal Court this week, Mr Tarrant made the sensational claims against Mr Shorten, who was finance minister at the time of the fraud, and former attorney-general Justice Duncan Kerr who oversaw Mr Tarrant's appeal against his seven-year ban in the Administrative Appeals Tribunal (AAT).
He claimed ASIC needed a scapegoat to cover up its handling of the fraud, which robbed Australians of $176 million in superannuation savings.
In his opening address, Mr Tarrant said Australians had been led to believe the fraud happened in far away, exotic locations beyond the control of the regulator at the hands of an international mastermind.
Yet Astarra Strategic Fund was a "clumsy and opportunistic" Ponzi scheme, operating 450 metres from ASIC's Sydney headquarters, he said.
"Every great cover-up needs a scapegoat and I was ASIC's scapegoat," he said.
Mr Tarrant said ASIC investigators were unable to negotiate with his lawyers during his AAT appeal because Mr Shorten's office was "driving the prosecution".
"I relayed to the tribunal in my correspondence my concerns that I was being made a scapegoat for the industry failings," he said.
Mr Tarrant alleged the tribunal's actions gave an "apprehension of bias" that failed to afford procedural fairness to his appeal against his seven-year ban for recommending Astarra Strategic Fund to 220 clients. Trio Capital was the responsible entity for the fund.
Mr Tarrant claimed ASIC witnesses had informed him that "ASIC was out to break me" by "tying me up in court for as long as possible".
"The matter that underpins the apprehension of bias is President Kerr's political connections and membership of the ALP," Mr Tarrant said.
"This apprehension of bias is heightened when considering the background of the Trio Capital fraud and the highly political nature of the ASIC allegations brought against me," he said.
"President Kerr had cause to favour the ALP line in ensuring financial advisers took the blame for what was a fraud at fund manager level."
Justice Steven Rares said Justice Kerr was an independent judge and his past associations with the Labor Party did not mean he was biased or following a political agenda.
Mr Tarrant was told by the court his complaints of bias were not errors of law and therefore could not be considered in their ruling on whether to set aside the tribunal's finding that his seven-year ban was appropriate.
"No judge could possibly sit if they were a member of a political party before they became a member of the court ... they resign," Justice Rares said.
Mr Tarrant persisted, saying his opinion was shared with the general public and clients who lost money in Astarra.
Justice Rares said Mr Tarrant should have levelled his accusations at Justice Kerr - he should have asked the ex-attorney-general and former ALP member whether he was acting on instructions from Mr Shorten.
He said without doing so, he could not "come along here and say that ... it was no secret who he was, he was a public figure, minister in previous government, it was all on the public record ... if you had a perception that he wasn't going to bring an impartial mind you should have asked him to recuse himself and he could have made clear any misapprehension you might have had," the judge said.
"You can't come up here to us and say you just worked out he was former attorney-general in a previous government.
"He wasn't involved in [the] decision to take action against you, he was just sitting there as a judge, member of the AAT doing his job."
Mr Tarrant also criticised Throsby MP Stephen Jones, saying the Labor MP knew the AAT had confirmed the banning order two weeks before its decision was handed down on December 20, 2013.
"I'd like to know how he knew before I did ... how he had that knowledge," Mr Tarrant said, referring to Mr Jones' statement on December 6 that the Federal Court upheld the seven-year ban.
Both Justice Rares and Justice John Griffiths agreed Mr Jones was mistaken, even referring to the wrong jurisdiction.
He must have made some assertions on what ASIC had originally done when he made a statement that was "completely inaccurate", Justice Rares said, adding there was no suggestion that information came from Justice Kerr.
"I've made my point and I'd like to move on," Mr Tarrant replied.
Mr Tarrant is appealing against his seven-year ban, claiming 17 errors of law, including the "political bias" when the AAT affirmed his seven-year ban.
He said Mr Shorten quickly agreed to compensate 88 per cent of the 6000 investors in Astarra Strategic Fund but "disgracefully seized the political opportunity" in that the majority of other investors had used self-managed super funds to invest.
"So Shorten compensated the industry super funds putting the self-managed super fund sector on show as being unsafe," Mr Tarrant said.
The panel of three judges has reserved its decision.