Andrews given nine-year ban, Richard facing time in the can

Then those pathetic putrid looters/Came up behind me to bully, ambush and bash -

By InvestSMART · 12 Aug 2011

By InvestSMART ·
12 Aug 2011

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Then those pathetic putrid looters/Came up behind me to bully, ambush and bash -

Callous bulls in a fragile china shop/Plundering nothing less than someone else's cash

THE bard of Trio Capital has written his last stanza in the saga of the theft of $180 million from Australian investors.

Yesterday David Andrews, 59, a former chairman of Trio, was banned from financial services and being a director for nine years, the longest suspension yet handed to three Trio directors who failed to protect investors.

Today the investment manager of Trio, Shawn Richard, is due to be sentenced to up to 10 years in jail.

More than $180 million has been lost in two offshore hedge funds run by Trio, Astarra Strategic and ARP Growth.

The Herald revealed last year Mr Andrews was the author of what appeared to be a lightly fictionalised account of the Trio imbroglio under his pen name, David Morisset.

The excerpt featured a shady Hong Kong businessman, high-octane hedge funds and a murder in a red light district - all elements of Australia's largest superannuation theft from the sleepy Albury fund manager chaired by Mr Andrews.

Mr Andrews's writings after the Trio collapse included the confessional poems Loser (quoted above) and Fanfare for Failure.

While silent on Mr Andrews's highly commended talent as a poet, the chair of the Australian Securities and Investments Commission, Greg Medcraft, gave him a scathing review.

"We believe Mr Andrews failed in his duties as officer of the responsible entity of the Astarra Strategic Fund and therefore it's inappropriate for him to be involved in the financial services industry or act as director," Mr Medcraft said.

Mr Andrews was an economist who worked for seven years with the Australian Anglican Church's funds management arm, Glebe Asset Management, before joining Trio in 2005.

At Trio he chaired the board and also held roles as chairman of the investment committee and chairman of the risk and compliance committee.

An enforceable undertaking shows how during Mr Andrews's time at Trio millions of dollars were directed into the Astarra Strategic hedge fund without conducting proper valuations.

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Frequently Asked Questions about this Article…

What was the Trio Capital scandal and how did it affect investors?

The Trio Capital scandal involved the collapse of offshore hedge funds run by Trio, which led to more than $180 million being lost by Australian investors. The losses were linked to the Astarra Strategic and ARP Growth hedge funds and prompted regulatory action and public scrutiny of Trio’s governance.

How much money was lost in Trio Capital’s funds (Astarra Strategic and ARP Growth)?

More than $180 million was lost across two offshore hedge funds run by Trio Capital — Astarra Strategic and ARP Growth — making the case one of the largest reported superannuation losses tied to a single fund manager.

What penalty did former Trio chairman David Andrews receive?

David Andrews, 59, was banned from providing financial services and from acting as a company director for nine years. ASIC described his performance as a failure of duties while he chaired Trio’s board and key committees.

Who is Shawn Richard and what legal outcome is he facing in the Trio case?

Shawn Richard was the investment manager at Trio. According to the report, he is due to be sentenced to up to 10 years in jail in connection with the Trio collapse.

What governance and valuation failures are reported in relation to Astarra Strategic?

An enforceable undertaking revealed that during David Andrews’s time at Trio millions of dollars were directed into the Astarra Strategic hedge fund without conducting proper valuations, a key governance and valuation failure cited by regulators.

What roles did David Andrews hold at Trio Capital before the collapse?

At Trio, David Andrews chaired the board and also served as chairman of the investment committee and the risk and compliance committee. Before joining Trio in 2005, he worked as an economist for seven years at Glebe Asset Management.

How did regulators like ASIC respond to the Trio Capital losses?

ASIC publicly criticized the failures at Trio, with ASIC chair Greg Medcraft saying Andrews failed in his duties and that it was inappropriate for him to be involved in the financial services industry. ASIC’s actions included the nine‑year ban and the disclosure of enforceable undertakings concerning improper valuations.

Did David Andrews write about the Trio collapse and under what name?

Yes. The Herald reported that David Andrews authored a lightly fictionalised account of the Trio imbroglio under the pen name David Morisset and later published confessional poems such as 'Loser' and 'Fanfare for Failure' referencing the affair.