Monday, 3 June 2013
I would like to ask the Minister Representing the minister for Minister for Financial Services and Superannuation—as we are now told that he is—some questions about the Trio fraud in which $176 million was defrauded from over 6,000 investors, including a significant number of my constituents. In fact, my constituents who invested in the ARP Growth Fund—together with others from elsewhere in Australia who invested in that fund—lost, on average, $700,000. Only one local foot soldier, Mr Shawn Richard, has been jailed in this regrettable episode. The international mastermind is widely believed to be Mr Jack Flader, and there are others involved but it seems they have not been pursued by the Australian regulatory authorities.
A parliamentary committee investigation and report made a series of unanimous recommendations, I am pleased to say, including that there ought to be an investigation into likely criminal activity in association with the Trio matter. In responding recently to this report the minister released, amongst other things, a review conducted by Treasury, which put a whitewash over what had happened. The Treasury review says that ASIC took regulatory reaction in relation to Trio capital within a short period of time but, similarly, once sufficient evidence was available, APRA acted quickly to freeze Trio capital assets.
APRA carried out four prudential reviews of Trio between 2005 and 2009. None of those reviews led it to taking any action, a point which APRA officials conceded to me in questioning, when they appeared before the Corporations and Financial Services Committee. The Treasury's report concludes: 'A key finding of this review is that APRA and ASIC carried out their roles and responsibilities appropriately.' Isn't that splendid? That is very good news for all those Australians who lost their retirement savings in the collapse of Trio.
In that regard, I have the following questions: (1) Why did it take you from May 2012, when the parliamentary committee reported, to March 2013 before you provided a response? (2) Why did you describe my constituents and others who invested via self-managed superannuation funds as 'swimming outside the flags' when they were, in fact, investing via product-disclosure statements in managed investment scheme disclosure statements that had been lodged with ASIC, and do you stand by that characterisation? (3) Do you agree with the glowing assessment given by Treasury of the performance of APRA and ASIC, who managed to notice that absolutely nothing was going wrong, for six years, in the period between an existing small, reputable funds manager being taken over by an international criminal syndicate and the whistle finally being blown not by the regulators but by an alert industry participant, who happened to have such sufficient connections within the bureaucracy that he was able finally to get some attention on this matter? (4) Are you satisfied that continuing efforts are being made by ASIC, APRA, the Australian Federal Police and other agencies to investigate the Trio fraud, consistent with the unanimous recommendations of the parliamentary committee? (5) Are you comfortable that we have a situation in which sophisticated international criminals evidently are able to target the retirement savings of Australians and do so with impunity, and if you are not comfortable with it, what are you doing about it?
Mr Deputy Speaker, on a point of order—