JACK Flader, the former Hong Kong businessman exposed as the mastermind of Australia's biggest superannuation theft, has been cleared of breaking any Australian laws.
Despite previously naming Mr Flader the "ultimate controller" of a network of dodgy offshore funds that ripped off $123 million in the Trio Capital scam, the corporate watchdog yesterday said Mr Flader was in the clear.
"Based on inquiries about Trio to date, ASIC believes there is currently insufficient evidence to prove a breach by him of Australian law," the Australian Securities and Investments Commission said.
Two weeks after a parliamentary committee gave a scathing assessment of regulators' lack of action over the Trio thefts, ASIC defended its investigation.
John Telford, who lost a disability payout of $600,000 in the collapse, said he was "bowled over" that Mr Flader had escaped authorities for so long.
"What I can't understand is that it's public information that he's pulled off various large amounts of capital from around the world," he said. "What boggles my mind is: why haven't they done something more thorough?"
The head of the parliamentary inquiry, Deb O'Neill, said ASIC's statement should not be the finish of the matter. "People want this to be pursued to the very end it's now the responsibility of the Australian Federal Police and the Australian Crime Commission to investigate," she said.
Mr Flader has become a poster boy for regulator indifference after detailed exposure of his central role in the December 2009 collapse of Trio Capital.
BusinessDay has reported how Mr Flader enjoyed the fruits of his activities including luxury sessions at the $1500-a-night Bulgari Resort in Bali, globetrotting to 80 destinations over 3 years, and twice visiting Hugh Hefner's Playboy mansion all the time siphoning off Australian investors' funds.
BusinessDay has also revealed Mr Flader's links to two other offshore investment scandals, disgraced UK stockbroker Pacific Continental Securities and his role as a defendant in the $US1billion Derivium scandal in the US.
When Shawn Richard was jailed in December 2010 for 2 years for his role in the thefts, Justice Peter Garling accepted ASIC's evidence that he acted on Mr Flader's instructions.
"I accept that . . . Mr Flader was the architect and ultimate controller of the scheme," he said.
In yesterday's statement, ASIC said it "would provide relevant information relating to Mr Flader to the Australian Federal Police and the Australian Crime Commission".
Not only did ASIC clear Mr Flader, but it sided with its fellow regulator, the Australian Prudential Regulation Authority, in blaming losses in a Trio fund called ARP Growth on failed investments.
The committee did not accept APRA's assessment, favouring a view that $53 million in the fund had been stolen. The whistleblower who uncovered the Trio fraud, John Hempton, said: "The reluctance of ASIC to prosecute fraud at ARP Growth is extraordinary."