TheAustralian Prudential Regulation Authority (APRA)and the Australian Securities and Investments Commission (ASIC) have both accepted an enforceable undertaking from a third former AM Corporation director in light of its investigation into the AM Diversified Traded Policies Fund (DTPF).
The undertaking given byLifeTrack Managementdirector, Barry Egan, mirrors that of both AM Corporation founder David Smith and former director Alan Rich, who were banished from the industry for a period of 10 years back in August.
APRA has accepted an enforceable undertaking from Egan he too will not occupy any role as a responsible officer in any superannuation entity regulated by it or an investment manager or custodian for a period of 10 years.
While ASIC an enforceable undertaking requiring Egan not to act as a director or officer of any company holding an Australian Financial Services Licence (AFSL), or of a listed investment company, for five years
APRA’s concern over the fund led to its intervention and the subsequent freezing of all DTPF assets back in 2001 by LifeTrack – the approved trustee of the fund, although this has since been revoked.
Despite APRA obtaining undertakings from all three former directors, the regulator’s investigations have not to date uncovered any instances of dishonesty by any of the parties.
However the regulator did find the group, under the Superannuation Industry (Supervision) Act 1993, had failed to implement a formal liquidity management plan for various traded policy funds, continued to purchase traded policies when the traded policy funds were experiencing low and negative liquidity, and caused other diversified funds under its trusteeship to purchase traded policies.
Last November litigation funding firm IMF (Australia) agreed to bankroll a case against AM Coproration, LifeTrack and group directors Smith and Rich on behalf of some 400 superannuants in relation to $20 million in lost investments.
