ASIC’s failings on Sterling and Mayfair re-ventilated

The failings of the Australian Securities and Investments Commission (ASIC) with respect to the Sterling Investment Trust and Mayfair 101 are facing serious re-examination as a result of the Senate Economics Committee inquiry into ASIC investigation and enforcement.

Amid a growing list of submissions to the Senate committee inquiry, victims of the Mayfair 101 and Sterling collapses have made clear their ongoing dissatisfaction with the ASIC’s handling of the issues.

The closing date for submissions to the committee was 28 February, but the committee has revealed that the large number of submissions it has received means that it is having to work through them before progressively making them public.

The submissions relating to the collapse of the Sterling Investment Trust make particular reference to the proposed Compensation Scheme of Last Resort (CSLR) and the fact that it will likely not be accessible to victims because it was a Managed Investment Scheme.

One of the key elements of the committee’s terms of reference is “whether ASIC is meeting the expectations of government, business and the community with respect to regulatory action and enforcement”.

The submissions relating to the collapse of Sterling and Mayfair 101 all relate to a belief that ASIC knew the products were problematic and therefore should have done more to make those problems more obvious to investors.

Where Mayfair 101 was concerned, submissions pointed to accountants and advisrs declaring their clients to be “sophisticated investors”.

Among those making a submission to the Senate Committee inquiry are a couple claiming to be the first couple to evicted from their home by the Supreme Court as victims of the Sterling Rent for Life scheme.

In their submission, they claim that “ASIC knew of the Sterling Frist problems at least two years before we signed our Rental Leases in July 2017” and claiming to be amazed that “a Regulator like ASIC can take no action in this time and allow us and other aged pensions to have their life savings stolen by known failed Directors of previous companies”.