Freeze for LM's Drake

The Supreme Court of Queensland ordered Peter Drake to surrender his passport and froze his assets following an application by the Australian Securities and Investments Commission (ASIC). The orders prevent him from selling any assets except his Mermaid Beach home, which was expected to be sold that weekend.

LM Investment Management collapsed in March, leaving about 12,000 investors owed an estimated $750 million, according to the article.

Surplus sale proceeds from the Mermaid Beach home are to be held in Mr Drake’s solicitors' trust account and cannot be used unless authorised by a court order or the regulator (ASIC).

ASIC suspended Peter Drake’s financial services licence for two years in April and applied for court orders that led to his passport surrender and asset freeze. ASIC is also investigating the directors’ conduct and loans to related companies in the lead-up to the collapse.

Because ASIC suspended Mr Drake’s financial services licence for two years, administrators could not hand the business back to the company’s directors, despite earlier suggestions that might have occurred.

ASIC is investigating the conduct of LM Investment Management’s directors and loans made to related companies in the period leading up to the firm’s collapse.

The matter is expected to return to court on October 9, as stated in the article.

Affected investors should be aware that the collapse left about 12,000 investors owed roughly $750 million, ASIC has suspended the key financial services licence and is investigating director conduct, and court orders have frozen assets with sale proceeds held under strict control. Further legal developments are expected when the matter returns to court on October 9.