Sterling Group abettors face charges

An Australian Securities and Investments Commission (ASIC) investigation has resulted in criminal charges laid against three men connected to troubled Sterling First group.

Sterling Corporate Services was the investment manager of key product, the Sterling Income Trust (SIT), which was registered as a managed investment scheme (MIS) with ASIC in 2012.

The group primary business line was long-term residential leases to retirees and seniors introduced in 2016, named the ‘Sterling New Life Lease’ (SNLL), which, upon purchase, required an investment to be made upfront to the SIT to cover ongoing lease payments.

In August 2017, ASIC announced an interim stop order on Product Disclosure Statements (PDS) issued by Theta Asset Management related to investments in the SIT. Theta agreed to a final stop order which allowed no offers, issues, sales or transfers of interests in the SIT to be made until an updated PDS was approved, which did not come into effect until October 2017.

The Sterling First’s group of companies collapsed in May 2019, which resulted in several SNLL tenants unable to pay their lease and losing their homes.

Founder of the Sterling Group, Raymond Jones, and Simon Bell have each been charged with 11 charges of aiding and abetting Sterling Corporate Services to engage in dishonest conduct in relation to a financial product or service.

Ryan Jones, the son of Raymond Jones, has also been charged with 10 charges of aiding and abetting Sterling Corporate Services to engage in dishonest conduct in relation to a financial product or service.

The three men fronted Perth Magistrates Court on 3 November, and are subject to a maximum penalty of 10 years’ imprisonment and/or a fine of 45,000 penalty units if found guilty.