ASIC sues EQT over Shield
The Australian Securities and Investments Commission (ASIC) has started Federal Court civil penalty proceedings against Equity Trustees Superannuation Limited relating to the Shield Master Fund alleging failures in due diligence.
Announcing the move, ASIC claimed that as superannuation trustee, Equity Trustees oversaw the investment of around $160 million of retirement savings into Shield over 2023 and 2024 through its fund.
Commenting on the move, ASIC Deputy Chair Sarah Court said ASIC was taking action against Equity Trustees as part of its ongoing work to protect members’ superannuation savings.
“Instead of acting as an effective gatekeeper for its members’ retirement savings, ASIC alleges Equity Trustees allowed thousands of members invest to in Shield which had no track record. Those members ultimately saw their super balances eroded.
“Superannuation trustees play a critical role helping people save for their retirement. We expect them to do so with care and skill and put the interests of their members first.
“This action should send a clear message to superannuation trustees: proper due diligence is needed when offering investment options for members,” Court said.
ASIC alleges Equity Trustees failed in relation to Shield:
- to exercise the same degree of care, skill and diligence as a prudent superannuation trustee would
- to act in the best financial interests of its members
- to do all things necessary to ensure the financial services covered by its Australian financial services licence were provided efficiently, honestly and fairly.
“This is the first action against a superannuation trustee in relation to this complex set of investigations and we expect more cases to come,” Court said.
“Our first priority has been preserving assets for the benefit of investors, but the next phase will be holding key players to account.”
ASIC is seeking declarations and civil penalties from the Court.
Equity Trustees later issued a statement to the Australian Securities Exchange in which it acknowledged ASIC’s actions and said it was considering the regulator’s approach and would respond to the substance of the claims in due course.
It said it had fully cooperated with ASIC’S investigations and is continuing to support impacted members by taking steps to maximise their recoveries from the liquidation process.
Let’s just save everyone a lot of time & trouble…..rather than stretching out the pain by creating some false sense of justice for victims.
Step 1 – take them to court and fine Equity Trustee’s $16,889, come to a settlement 1.5 years later, with the CEO to resign with a large paycheck,
Step 2- blame the individuals, don’t anyone entity, manager or process- best to financial planners and introduce some tighter regulations, maybe lift CPD points from 40 hours to 20,000 hours, higher education standards…hey why not an Bi-Annual FASEA exam. 98% pass rate for a little spice….
Step 3- do some type of deal with bodies like the FAAA to also help shift the blame onto financial planners. The FAAA can sign them up for some courses that the FAAA can sell, eg assitance with passing the now bi-annual FASEA exam and completion of 20,000 CPD points, Make some false promises too say mandatory memberships, (you don’t need to actually implement this) and the FAAA will sell their mothers to get on board.
Step 4 – issue final press release stating significant reforms have now been implemented to improve consumer confidence.
Rinse and repeat, yarda yarda yarda…We’ve all done this dance many many times over.
When reality Step 1 should be gut ASIC and start working with Advisers and avoid steps 1-4 so it won’t happen again.