ASIC failed in solving Trio case
The Australian Securities and Investments Commission (ASIC) has been accused of releasing inaccurate and misleading information about the Trio Capital Limited fraud case, and of prioritising its own crisis management controls over public interest.
That is the accusation from the Victims of Financial Fraud (VOFF) group, which said ASIC, under chairperson Greg Medcraft, sought to maintain its own regulatory credibility by misleading the public and the NSW Supreme Court.
“Not a single head rolled over ASIC’s incompetence in Trio despite damning evidence. VOFF’s September 2013 press release called for a complete restructure of ASIC and that Medcraft must resign. Nothing happened,” VOFF said.
The group pointed to what it said was new evidence, which it claimed suggested court statements made when perpetrator, Shawn Richard, was sentenced in the NSW Supreme Court in August 2011 were incorrect. The group pointed to a letter it received from the Guernsey Financial Services Commission (GFSC), which mentioned correspondence between a Guernsey citizen, Carl Meerveld, and ASIC.
Meerveld had offered his assistance to help ASIC’s Trio fraud investigation. The GFSC letter, released by Meerveld in 2016, defended his previous position as a manager of one of Trio’s underlying funds, which lost millions of dollars. His connection with the Trio fund, discovered by Guernsey citizens, was discovered after he applied to become a deputy.
“The GFSC letter dated 3 September 2010 points out that ASIC thanks Mr Meerveld for his offer of assistance but wish to hold off from taking up the offer,” VOFF said.
“The release of the GFSC letter demonstrated that ASIC’s decline was like a clean bill of health, enabling Mr Meerveld to become the St Sampson's Deputy.”
VOFF said other overseas Trio operators such as Meerveld’s Hong Kong colleague, Jack Flader, had also offered information but said ASIC showed no interest.
“Furthermore, ASIC failed to inform the Parliamentary Joint Committee that were assigned to investigate the Trio fraud or inform the NSWSC of Flader and Meerveld’s willingness to assist,” VOFF said.
In August 2011, the NSW Supreme Court trial noted Richard had assisted ASIC by providing information to ASIC.
ASIC failed to inform the NSWSC that two cooperative witnesses from overseas jurisdictions did offer assistance. Without the facts, the court possibly overvalued the significance of Mr Richard’s assistance to ASIC. The court rewarded Mr Richard’s pleas of guilty, with a discount of 25 per cent off his sentence with an additional 12.5 per cent discount allowed for the utilitarian value of the pleas of guilty,” VOFF said.
VOFF accused ASIC of failing to prevent known criminals from entering the Australian financial system, and failed to provide accurate information when updating the public about the Trio fraud case, while also failing to conduct background checks on the new owners of an Australian business.
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