APRA details Trio/Astarra lessons
The Australian Prudential Regulation Authority (APRA) has sought to defend its handling of the Trio/Astarra collapse, particularly its use of enforceable undertakings instead of prosecutions.
In a special report on the Trio/Astarra investigation, released today, the regulator said the acceptance of the enforceable undertakings from Trio's former directors was "considered to be an effective regulatory response and an appropriate alternative to court based disqualification proceedings".
It said this was because "it allowed APRA to achieve a more expeditious, certain and cost-effective resolution of its concerns".
APRA also detailed important lessons it believed had been learned from the Trio/Astarra collapse specifying them as being:
- Inadequate investment governance processes;
- Failure to adequately manage conflicts of interest from dealings with related parties; and
- Failure to have adequate controls to mitigate fraud-related investment risk.
The APRA analysis pointed out that "as a result of APRA's concerns that Trio and its former directors had failed to act in members' best interests, APRA accepted enforceable undertakings from 13 individuals who were Trio directors between 2003 and 2009 that effectively removed these individuals from holding senior roles in the APRA-regulated superannuation industry for periods ranging between 3 years 6 months and 15 years (with one having no expiry date)".
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