ASIC stops investigation into man behind $176m fraud
The abandonment of the investigation ends any chance of charges being laid against Mr Flader, who a court found was the "ultimate controller" of Trio Capital, which bilked investors of $176 million.
Despite the assistance of Hong Kong and other overseas authorities, Australian Securities and Investments Commission investigators were left frustrated after they were unable to establish a breach of Australian law.
ASIC is facing a Senate inquiry into its performance after criticism of its response to misconduct by financial planners at the Commonwealth Bank.
It is believed ASIC interviewed Mr Flader several times, assisted by the Securities and Futures Commission of Hong Kong, where he lives. Information was also gleaned from tax haven jurisdictions in which Mr Flader operated.
ASIC is believed to have investigated whether Mr Flader committed a wide range of offences but was unable to mount a prosecution because it could not find enough evidence that he had specific knowledge of events in Australia.
A parliamentary inquiry into the collapse of Trio Capital in May last year slammed regulators, including ASIC, for their scant efforts to prosecute Mr Flader. The following month, ASIC said it lacked evidence to show he had breached Australian law but would provide information to federal police, the Crime Commission and overseas regulators.
"ASIC, the Australian Federal Police and our overseas regulatory counterparts have sought to obtain extra evidence to establish that Mr Flader breached Australian law", ASIC said on Tuesday.
"However, despite this work, there is insufficient evidence to prove Mr Flader breached Australian law ... ASIC is now finalising its investigation into Mr Flader."
Trio went into administration in December 2009 and its Astarra investment funds were wound up by order of the NSW Supreme Court in March the following year.
Executive Shawn Richard was sentenced to a maximum of 2½ years' jail in August 2011 after pleading guilty to dishonesty charges. In sentencing, NSW Supreme Court judge Peter Garling said Richard "acted under the ultimate control and instruction of Mr Jack Flader".
Fairfax Media was unable to reach Mr Flader in Hong Kong.
- Former investment manager Tony Maher, formerly known as Paul Gresham, has been released on bail after pleading guilty to 20 Trio-related charges in Sydney's Downing Centre Local Court on Tuesday morning.
Maher, 60, of Katoomba, admitted to making false or misleading statements that resulted in his company, PST Management, reaping more than $500,000 in management fees. He admitted repeatedly overstating the value of the shares of a Trio fund, ARP Growth, held in British Virgin Islands company Professional Pensions ARP.
The matter is set down for sentencing in the Sydney district court on November 8.
Frequently Asked Questions about this Article…
ASIC stopped the investigation into Jack Flader because they were unable to establish a breach of Australian law, despite assistance from overseas authorities and extensive efforts to gather evidence.
Jack Flader was identified as the 'ultimate controller' of Trio Capital, which was involved in a superannuation fraud that defrauded investors of $176 million.
Overseas authorities, including the Securities and Futures Commission of Hong Kong, assisted ASIC by providing information and support during the investigation into Jack Flader's activities.
The parliamentary inquiry criticized regulators, including ASIC, for their limited efforts to prosecute Jack Flader and highlighted the lack of evidence to prove he breached Australian law.
Shawn Richard, an executive involved in the fraud, was sentenced to a maximum of 2½ years in jail after pleading guilty to dishonesty charges.
Tony Maher, formerly known as Paul Gresham, pleaded guilty to 20 Trio-related charges, including making false or misleading statements that resulted in his company earning over $500,000 in management fees.
The NSW Supreme Court ordered the winding up of Trio Capital's Astarra investment funds and sentenced Shawn Richard for his role in the fraud.
ASIC faced challenges in prosecuting Jack Flader due to insufficient evidence to prove he had specific knowledge of events in Australia, despite extensive investigations and international cooperation.
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