MFS IM directors get long bannings, big penalties
Five of the most senior executives in now-defunct MFS Investment Management have received long disqualifications and heavy fines in the Queensland Supreme Court following charges pursued by the Australian Securities and Investments Commission (ASIC) over the handling of its Premium Income Fund (PIF).
ASIC announced today that the court had ordered that two former chief executives, a deputy chief executive and a former chief financial officer of MFS IM had been dealt with by the court.
It said Michael Christodoulou King (former Chief Executive Officer (CEO) and Director of MFS Ltd) had been disqualified from managing corporations for 20 years and ordered to pay a pecuniary penalty of $300,000 along with paying $177,017,084 compensation to PIF and 60 per cent of ASIC's costs.
The regulator also reported that Craig Robert White (former Deputy CEO (and for a short period, CEO) and director of MFS Ltd and MFSIM) had been permanently disqualified from managing corporations and ordered to pay a pecuniary penalty of $650,000, as well as paying $205,755,601 compensation to PIF and 70 per cent of ASIC's costs.
Guy Hutchings (former CEO and director of MFSIM) had been disqualified from managing corporations for 25 years and ordered to pay a pecuniary penalty of $350,000 as well as paying $28,738,517 compensation to PIF and 70 per cent of ASIC's costs.
David Mark Anderson (former CFO and Company Secretary of MFS Ltd) had been disqualified from managing corporations for 25 years, and ordered to pay a pecuniary penalty of $500,000, as well as paying $205,755,601 compensation to PIF and 80 per cent of ASIC's costs.
Marilyn Anne Watts (former funds manager of MFSIM) had been disqualified from managing corporations for five years and ordered to pay a pecuniary penalty of $90,000 and 40 per cent of ASIC's costs.
The court held that the breaches were committed in relation to the defendants’ involvement in the misappropriation of $147.5 million of funds that had been held by the managed investment scheme known as the Premium Income Fund (PIF) on behalf of unit-holders.
It held that the misappropriated funds were used to pay debts owed by other related entities in the MFS Group (which was subsequently known as Octaviar).
The MFS Group collapsed in 2008 owing $2.5 billion.
Recommended for you
BlackRock has taken a $25 million stake in Generation Development Group as the two firms announce a strategic alliance to design and distribute tailored retirement solutions.
The global asset manager is launching its second alternatives fund for Australian wealth clients, focusing on private equity investment opportunities.
Trading platform Selfwealth has officially delisted from the ASX, marking the final step of Svava’s acquisition plans as it implements a scheme of arrangement.
US alternative credit manager Apollo Global Management is viewing Australia as a “priority market”, as it launches a fund for Australian wholesale investors with Channel Capital.
