Footnotes

[1]        Australian Prudential Regulation Authority, Australian Superannuation Bulletin: Statistics, June 2011, issued 29 February 2012, p. 5 http://www.apra.gov.au/Super/Publications/Documents/June%202011%20Annual%20Superannuation%20Bulletin.pdf (accessed 1 May 2012).

Chapter 1 - Introduction

[1]        Super System Review Panel, Final Report, 30 June 2010, http://www.supersystemreview.gov.au/content/content.aspx?doc=html/final_report.htm (accessed 1 May 2012).

[2]        Super System Review Panel, Final Report, 30 June 2010, p. 16, http://www.supersystemreview.gov.au/content/content.aspx?doc=html/final_report.htm (accessed 1 May 2012).

[3]        Super System Review Panel, Final Report, 30 June 2010, p. 247, http://www.supersystemreview.gov.au/content/content.aspx?doc=html/final_report.htm (accessed 1 May 2012).

[4]        Parliamentary Joint Committee on Corporations and Financial Services, Inquiry into financial products and services in Australia, November 2009, p. vii.

[5]        The Hon. Chris Bowen MP, (former) Minister for Financial Services, Superannuation and Corporate Law, 'Overhaul of Financial Advice', Media Release No. 036, 26 April 2010.

[6]        The Senate Economics Legislation Committee, 'Inquiry into the Corporations Amendment (Future of Financial Advice) Bill 2011 [Provisions] and the Corporations Amendment (Further Future of Financial Advice Measures) Bill 2011 [Provisions]', March 2012, p. 7.

[7]        The Corporations Amendment (Future of Financial Advice) Bill 2011 was introduced into the House of Representatives on 13 October 2011; the Corporations Amendment (Further Future of Financial Advice Measures) Bill 2011 was introduced into the House of Representatives on 24 November 2011.

[8]        The Senate Economics Legislation Committee, Inquiry into the Corporations Amendment (Future of Financial Advice) Bill 2011 [Provisions] and the Corporations Amendment (Further Future of Financial Advice Measures) Bill 2011 [Provisions], March 2012, p. 2.

[9]        The Hon. Bill Shorten MP, Minister for Financial Services and Superannuation, 'Smoother transition for financial advice reforms', Media Release No. 013, 14 March 2012.

[10]      Treasury, 'Future of Financial Advice: Review of compensation arrangements for consumers and financial services – Consultation Paper', http://futureofadvice.treasury.gov.au/content/Content.aspx?doc=consultation/compensation_arrangements_CP/default.htm (accessed 21 March 2012).

[11]      APRA, Superannuation, http://www.apra.gov.au/Super/Pages/default.aspx (accessed 1 May 2012).

[12]      ASIC, How do the RSE and AFS licensing application processes work together?, 31 March 2011, http://www.asic.gov.au/asic/asic.nsf/byheadline/How+do+the+RSE+and+AFS+licensing+application+processes+work+together%3F?openDocument (accessed 1 May 2012).

[13]      APRA, Submission 41, p. 5.

[14]      ASIC, Submission 51, p. 96.

[15]      ASIC, Submission 51, p. 97.

[16]      ASIC, How do the RSE and AFS licensing application processes work together?, 31 March 2011, http://www.asic.gov.au/asic/asic.nsf/byheadline/How+do+the+RSE+and+AFS+licensing+application+processes+work+together%3F?openDocument (accessed 1 May 2012).

[17]      ASIC, How do the RSE and AFS licensing application processes work together?, 31 March 2011, http://www.asic.gov.au/asic/asic.nsf/byheadline/How+do+the+RSE+and+AFS+licensing+application+processes+work+together%3F?openDocument (accessed 1 May 2012).

[18]      now Chapter 5C of the Corporations Act 2001

[19]      ANZ, Submission 70, p. 3.

[20]      ANZ, Submission 70, p. 3.

[21]      Corporations Act 2001, section 601FC, chapter 5C

[22]      Corporations Act 2001, section 601ED, chapter 5C

[23]      ASIC, Submission 51, p. 113.

[24]      ASIC, Submission 51, p. 35.

[25]      ASIC, Submission 51, p. 36.

[26]      ASIC, Submission 51, p. 38.

[27]      ASIC, Submission 51, p. 38.

[28]      ASIC, Submission 51, p. 96.

[29]      Draft Explanatory Memorandum, Superannuation Legislation Amendment (Further MySuper and transparency Measures) Bill 2012, p. 6. http://strongersuper.treasury.gov.au/content/exposure_drafts/super_legislation_amendment/downloads/Explanatory-Memorandum.pdf (accessed 27 April 2012).

[30]      Australian Taxation Office, Definitions, http://www.ato.gov.au/corporate/content.aspx?menuid=6751&doc=/content/8153.htm&page=1#P995_83563 (accessed 28/07/2011).

[31]      Australian Taxation Office, 'How your self-managed superannuation fund is regulated', http://www.ato.gov.au/content/downloads/spr00162377n71454.pdf (accessed 10 May 2012).

[32]      S. Wallis, Financial System Inquiry Final Report, March 1997, pp 333–334.

Chapter 2 - The structure, operation and collapse of Trio Capital

[1]        See the comments of Justice Peter Garling, Regina v Shawn Richard [2011] NSWSC 866, 12 August 2011, paragraph 28.

[2]        Funds choose to be regulated by APRA. An APRA-regulated fund must have a Registrable Superannuation Entity (RSE) licence.

[3]        Report to creditors pursuant to section 439A of the Corporations Act 2001, Trio Capital Limited, 8 April 2010, PPB, p. 12.

[4]        Report to creditors pursuant to section 439A of the Corporations Act 2001, Trio Capital Limited, 8 April 2010, PPB Advisory, Submission 26, p. 12.

[5]        Mr Shawn Richard, Answers to questions on notice, received 27 April 2012, p. 2.

[6]        PPB Advisory, Submission 26, p. 7.

[7]        ASIC, 'Grant of financial assistance—Trio and Astarra investors', http://www.asic.gov.au/asic/asic.nsf/byheadline/Grant+of+financial+assistance+-+Trio+and+Astarra+investors?openDocument (accessed 17 April 2012).

[8]        Mr Ron Thornton, President, Association of ARP Unitholders Inc., Committee Hansard, 30 August 2011, p. 18.

[9]        ASIC, 'Grant of financial assistance—Trio and Astarra investors', http://www.asic.gov.au/asic/asic.nsf/byheadline/Grant+of+financial+assistance+-+Trio+and+Astarra+investors?openDocument (accessed 17 April 2012).

[10]      See Leonie Lamont, 'Ualan "loaded" super fees', The Age, 1 March 2012.

[11]      Figures 2.2, 2.3, 2.4 were all provided by PPB Advisory as attachments to Submission 26.

[12]      Mr Ron Thornton, President, Association of ARP Unitholders Inc, Committee Hansard, 30 August 2011, p. 19.

[13]      Mr Paul Gresham, Submission 71, p. 1.

[14]      Enforceable undertaking under section 93AA of the Australian Securities and Investments Act 2001, Mr Tony Maher (formerly known as Paul Anthony Gresham), p. 9.

[15]      Enforceable undertaking under section 93AA of the Australian Securities and Investments Act 2001, Mr Tony Maher (formerly known as Paul Anthony Gresham), p. 6.

[16]      PPB Advisory, Submission 26, p. 8.

[17]      Australian Prudential Regulation Authority, Submission 41, p. 5. For a description of the issuance of the PDS, see Association of ARP Unitholders, Submission 25, p. 40.

[18]      Under the terms of a Deferred Purchase Agreement, an investor will pay the purchase price on to acquire the delivery assets, which are typically listed shares or units. These assets are actually delivered some time later, often three to five years later. The number of delivery assets is determined by reference to the performance of a predefined underlying portfolio. See http://www.mcofinancial.com/Dictionary/Deferred%20Purchase%20Agreements.pdf (accessed 17 April 2012).

[19]      Australian Prudential Regulation Authority, Submission 41, p. 4.

[20]      PPB Advisory, Submission 26, p. 7.

[21]      APRA, Submission 41, p. 4.

[22]      This statement has been abridged. R v Shawn Darrell Richard [2011] NSWSC 866 (12 August 2011), starting at paragraph 29. http://www.lexisnexis.com.au/legal/auth/bridge.do?rand=0.3590918380238468

[23]      R v Shawn Darrell Richard [2011] NSWSC 866 (12 August 2011), starting at paragraph 29. http://www.lexisnexis.com/au/legal/auth/bridge.do?rand=0.3590918380238468

[24]      R v Shawn Darrell Richard [2011] NSWSC 866 (12 August 2011), starting at paragraph 29. http://www.lexisnexis.com/au/legal/auth/bridge.do?rand=0.3590918380238468

[25]      Mr Brett Manwaring, Director, PPB Advisory, Committee Hansard, 30 August 2011, p. 54.

[26]      Mr Brett Manwaring, Director; Mr Mark Robinson, Partner, PPB Advisory, Committee Hansard, 30 August 2011, pp 54–56.

[27]      ASIC, 'Grant of financial assistance—Trio and Astarra investors', http://www.asic.gov.au/asic/asic.nsf/byheadline/Grant+of+financial+assistance+-+Trio+and+Astarra+investors?openDocument (accessed 23 April 2012).

[28]      Mr Ross Tarrant, Submission 35, p. 1.

[29]      ASIC listed the ban on an online register but did not disclose the decision publicly.

[30]      Enforceable undertaking under section 93AA of the Australian Securities and Investments Act 2001, Mr Tony Maher (formerly known as Paul Anthony Gresham), p. 6.

[31]      Enforceable undertaking under section 93AA of the Australian Securities and Investments Act 2001, Mr Tony Maher (formerly known as Paul Anthony Gresham), pp 3–4.

[32]      ASIC, Submission 51, pp 90–91.

[33]      ASIC, Submission 51, p. 89.

[34]      ASIC, Submission 51, p. 89.

[35]      PPB Advisory, Submission 26, p. 8.

[36]      The Trust Company, Submission 29, p. 3.

[37]      Mr John Hempton, 'A dark privatised social security story: Astarra, the missing money and how examining a fund manager owned by Joe Biden's family led to substantial regulatory action in Australia', Bronte Capital, 2 January 2010, http://brontecapital.blogspot.com.au/search?q=trio (accessed 17 April 2012).

[38]      Mr John Hempton, 'A dark privatised social security story: Astarra, the missing money and how examining a fund manager owned by Joe Biden's family led to substantial regulatory action in Australia', Bronte Capital, 2 January 2010, http://brontecapital.blogspot.com.au/search?q=trio (accessed 17 April 2012).

[39]      Mr John Hempton, 'A dark privatised social security story: Astarra, the missing money and how examining a fund manager owned by Joe Biden's family led to substantial regulatory action in Australia', Bronte Capital, 2 January 2010, http://brontecapital.blogspot.com.au/search?q=trio (accessed 17 April 2012).

[40]      In 2005, Mr Harry Markopolos wrote to the Securities and Exchange Commission in the United States pointing out issues with Madoff Investments, run by Bernie Madoff.

[41]      APRA, Submission 41, p. 4.

[42]      APRA, Enforceable Undertakings Register http://www.apra.gov.au/CrossIndustry/Pages/EnforceableUndertakings.aspx
(accessed 1 May 2012).

[43]      Based on information in submissions provided by ASIC, APRA, PPB Advisory, ARP Unitholders, Mr Colin Warne, the enforceable undertaking accepted by Mr Paul Gresham and the ASIC and APRA websites.

Chapter 3

[1]        Mr Shayne Bonnie, Committee Hansard, 6 September 2011, p. 7.

[2]        Mr Nicholas McGowan, Committee Hansard, 6 September 2011, p. 18.

[3]        Mr Ian Hogg, Committee Hansard, 6 September 2011, p. 23.

[4]        Name withheld, Submission 56, pp 1–2.

[5]        Mr Ross Tarrant, Submission 35, p. 2.

[6]        Mr Ron Thornton, President, Association of ARP Unitholders Inc., Committee Hansard, 30 August 2011, p. 18.

[7]        Mr Ross Tarrant, Submission 35, p. 1.

[8]        Mr Shayne and Mrs Tracey Bonnie, Submission 1, Supplementary Submission B, p. 2.

[9]        Mr John Telford, Submission 66, pp 2–3.

[10]      Mr John Telford, Submission 66, p. 3. The quote within this quote is sourced by Mr Telford as: 'Investors gutted by financial losses—study by Nicole Hasham', May 30 2011 http://www.illawarramercury.com.au/news/local/news/general/investors-gutted-by-financial-lossesstudy/2178201.aspx

[11]      Name withheld, Submission 3, p. 5.

[12]      Name withheld, Submission 55, p. 1.

[13]      Name withheld, Submission 56, p. 2.

[14]      Paragraph 912A(1)(a), Corporations Act 2001.

[15]      Paragraph 912A(g), Corporations Act 2001.

[16]      Section 912B, Chapter 7, Corporations Act 2001.

[17]      Corporations Act 2001, section 912B

[18]      Australian Securities and Investments Commission, Regulatory Guideline 126 – Compensation and insurance arrangements for AFS licensees, December 2010, p. 4.

[19]      Australian Securities and Investments Commission, Regulatory Guideline 126 – Compensation and insurance arrangements for AFS licensees, p. 15.

[20]      Australian Securities and Investments Commission, Regulatory Guideline 126 – Compensation and insurance arrangements for AFS licensees, December 2010, p. 15.

[21]      Section 227, Division 1, Part 23, Superannuation Industry (Supervision) Act 1993.

[22]      Section 227, Division 1, Part 23, Superannuation Industry (Supervision) Act 1993.

[23]      Section 229, Superannuation Industry (Supervision) Act 1993

[24]      Treasury, Submission 28, p. 1.

[25]      Treasury, Submission 28, p. 2.

[26]      Treasury, Submission 28, p. 2.

[27]      The Hon. Bill Shorten, Assistant Treasurer, Minister for Financial Services and Superannuation, 'Financial Assistance to Trio's Superannuation Fund Investors', Media Release No. 51, 13 April 2011, http://assistant.treasurer.gov.au/DisplayDocs.aspx?doc=pressreleases/2011/051.htm&pageID=003&min=brs&Year=&DocType=0, (accessed 8 November 2011).

[28]      The Association of Superannuation Funds of Australia Limited, Submission 31, p. 2.

[29]      Richard St. John, Review of compensation arrangements for consumers of financial services, April 2011, pp 52–53.

[30]      Richard St. John, Review of compensation arrangements for consumers of financial services, April 2011, p. 56.

[31]      Mr Paul Cohen, Submission 20, p. 3.

[32]      Mr and Mrs Roy and Barbara Fowler, Submission 17, p. 3.

[33]      Mr Paul Cohen, Submission 20, p. 3.

[34]      Name withheld, Submission 18, p. 2.

[35]      Name withheld, Submission 18, pp 2–4.

[36]      Name withheld, Submission 56, pp 1–2.

[37]      Parliamentary Joint Committee on Corporations and Financial Services, Inquiry into financial products and services in Australia, November 2009, p. 146.

[38]      SMSF Professionals' Association of Australia, Submission 44, p. 3.

[39]      The Association of Superannuation Funds of Australia Limited, Submission 31, p. 6.

[40]      SMSF Professionals' Association of Australia, Submission 44, p. 3.

[41]      Financial Planning Association of Australia, Submission 46, p. 36.

[42]      Financial Planning Association of Australia, Submission 46, p. 36.

[43]      CPA Australia, Submission 34, p. 2.

[44]      Moral hazard refers to a situation where a party insulated from risk behaves differently from how it would behave if it were fully exposed to the risk – risk arises because a person will not bear the full consequences or responsibilities of their actions and therefore acts less carefully than they otherwise would.

[45]      CPA Australia, Submission 34, p. 2.

[46]      Australian Taxation Office, Submission 27, pp 3–4.

[47]      Australian Taxation Office, Submission 27, pp 3–4.

[48]      Australian Taxation Office, Submission 27, pp 3–4.

[49]      Mr Richard St. John, Compensation arrangements for consumers of financial services, April 2012, p. iii.

[50]      Mr Richard St. John, Compensation arrangements for consumers of financial services, April 2012, p. iv.

[51]      Mr Richard St. John, Compensation arrangements for consumers of financial services, April 2012, p. 97.

[52]      Mr Richard St. John, Compensation arrangements for consumers of financial services, April 2012, p. 97.

[53]      Mr Richard St. John, Compensation arrangements for consumers of financial services, April 2012, p. 62.

[54]      Mr Richard St. John, Compensation arrangements for consumers of financial services, April 2012, p. 62.

[55]      Mr Richard St. John, Compensation arrangements for consumers of financial services, April 2012, p. 63.

[56]      Mr Richard St. John, Compensation arrangements for consumers of financial services, April 2012, p. 63.

[57]      Mr Richard St. John, Compensation arrangements for consumers of financial services, April 2012, p. 65.

Chapter 4 - The view of the regulators on the collapse of Trio Capital

[1]        KPMG, Submission 69, p. 6.

[2]        ASIC, Submission 51, p. 16.

[3]        ASIC, Regulatory Guide 166: Licensing, Financial requirements, May 2012, http://www.asic.gov.au/asic/pdflib.nsf/LookupByFileName/RG166a.pdf/$file/RG166a.pdf (accessed 1 April 2012).

[4]        Parliamentary Joint Committee on Corporations and Financial Services, Inquiry into financial products and services in Australia, November 2009, p. 7.

[5]        ASIC, Submission 51, p. 4.

[6]        ASIC, Submission 51, p. 12.

[7]        ASIC, Submission 51, p. 13.

[8]        ASIC, Submission 51, p. 15.

[9]        ASIC, Submission 51, p. 15.

[10]      ASIC, Submission 51, p. 15.

[11]      Mr Jeremy Cooper, ASIC, The integration of financial regulatory authorities – the Australian experience, paper presented to 30^th Anniversary Conference, 4 September 2006, p. 5.

[12]      APRA, Submission 41, p. 5. The committee notes that the Superannuation Legislation Amendment (Trustee Obligations and Prudential Standards) Bill 2012 introduces the power for APRA to make prudential standards, amends section 52 of the Superannuation Industry (Supervision) Act 1993 to expand the duties for registrable superannuation entity (RSE) licensees, applies new trustee duties to RSE licensees of an RSE that offers a MySuper product and applies duties to the directors of corporate trustees. The committee reported on the provisions of this bill in March 2012.

[13]      APRA, Submission 41, pp 5–6.

[14]      ATO, Submission 27, p. 2.

[15]      Reserve Bank of Australia, website, http://www.rba.gov.au/fin-stability/reg-framework/apra.html , (accessed 1 November 2011)

[16]      Mr Greg Brunner, Actuarial Market and Insurance Risk Services, Australian Prudential Regulation Authority, Committee Hansard, 4 April 2012, p. 9.

[17]      Mr Ross Jones, Deputy Chairman, Australian Prudential Regulation Authority, Committee Hansard, 30 August 2011, p. 33.

[18]      Mr Ross Jones, Deputy Chairman, Australian Prudential Regulation Authority, Committee Hansard, 30 August 2011, p. 33.

[19]      Mr Ross Jones, Deputy Chairman, Australian Prudential Regulation Authority, Committee Hansard, 30 August 2011, p. 33.

[20]      Mr Ross Jones, Deputy Chairman, APRA, Committee Hansard, 30 August 2011, p. 40.

[21]      APRA, Enforceable Undertakings Register, http://www.apra.gov.au/CrossIndustry/Pages/EnforceableUndertakings.aspx, (accessed 30 April 2012).

[22]      Mr Ross Jones, Deputy Chairman, Australian Prudential Regulation Authority, Committee Hansard, 30 August 2011, p. 41.

[23]      Mr Ross Jones, Deputy Chairman, APRA, Committee Hansard, 30 August 2011, p. 33.

[24]      Mr Ross Jones, Deputy Chairman, Australian Prudential Regulation Authority, Committee Hansard, 30 August 2011, p. 34.

[25]      Mr Ross Jones, Deputy Chairman, APRA, Committee Hansard, 30 August 2011, p. 34.

[26]      Mr Ross Jones, Deputy Chairman, Australian Prudential Regulation Authority, Committee Hansard, 30 August 2011, p. 38. Chapter 5 notes that in February 2012, ASIC accepted an enforceable undertaking from WHK auditor Timothy Frazer for his role in audits into the ASF conducted in 2008 and 2009.

[27]      Mr Keith Chapman, Executive General Manager, Supervisory Support Division, Australian Prudential Regulation Authority, Committee Hansard, 30 August 2011, p. 34.

[28]      Mr Keith Chapman, Executive General Manager, Supervisory Support Division, Australian Prudential Regulation Authority, Committee Hansard, 30 August 2011, p. 33–34.

[29]      Mr Keith Chapman, Executive General Manager, APRA, Proof Committee Hansard, 30 August 2011, p. 35.

[30]      Mr Ross Jones, Deputy Chairman, Australian Prudential Regulation Authority, Committee Hansard, 30 August 2011, p. 34.

[31]      Mr Ross Jones, Deputy Chairman, Australian Prudential Regulation Authority, Committee Hansard, 30 August 2011, p. 35.

[32]      Mr Keith Chapman, Executive General Manager, Supervisory Support Division, Australian Prudential Regulation Authority, Committee Hansard, 30 August 2011, p. 35.

[33]      Mr Keith Chapman, Executive General Manager, Supervisory Support Division, Australian Prudential Regulation Authority, Committee Hansard, 30 August 2011, p. 42.

[34]      In March 2012, the committee examined the provisions of the Superannuation Legislation Amendment (Trustee Obligations and Prudential Standards) Bill 2012.

[35]      Mr Keith Chapman, Executive General Manager, Supervisory Support Division, Australian Prudential Regulation Authority, Committee Hansard, 30 August 2011, pp 42–43.

[36]      ASIC, Submission 51, p. 11.

[37]      ASIC, Submission 51, p. 11. The committee took evidence in-camera from ASIC on 6 September 2011.

[38]      Mr Glen Unicomb, Senior Executive Leader, ASIC, Committee Hansard, 6 September 2011,
p. 10.

[39]      ASIC, Submission 51, p. 18.

[40]      Mr Medcraft confirmed in evidence to the committee that the date of the complaint was 21 September 2011.

[41]      Mr David McGuinness, Senior Executive Leader, ASIC, Committee Hansard, 6 September 2011, p. 2.

[42]      Mr Greg Medcraft, Committee Hansard, 6 September 2011, p. 4.

[43]      Mr Greg Medcraft, Committee Hansard, 6 September 2011, p. 4.

[44]      Mr Greg Medcraft, Committee Hansard, Sydney, 6 September 2012, p. 1.

[45]      Mr John Price, Senior Executive Leader, ASIC, Committee Hansard, 6 September 2011, p. 5.

[46]      ASIC, Submission 51, p. 35.

[47]      Mr John Price, Senior Executive Leader, ASIC, Committee Hansard, 6 September 2011, p. 5.

[48]      ASIC, Submission 51, p. 35.

[49]      ASIC, Submission 51, p. 35.

[50]      Mr John Price, Senior Executive Leader, ASIC, Committee Hansard, 6 September 2011, p. 5.

[51]      ASIC, Submission 51, p. 45.

[52]      ASIC, Submission 51, p 45.

[53]      ASIC, Submission 51, p 46.

[54]      ASIC, Submission 51, p 46.

[55]      ASIC, Submission 51, p. 21.

[56]      ASIC, Committee Hansard, 6 September 2011, p. 8.

[57]      See Parliamentary Joint Committee on Corporations and Financial Services, Inquiry into financial products and services in Australia, November 2009, recommendation 6, p. 139 and recommendation 8, pp 140–141.

Recommendation 6: The committee recommends that section 920A of the Corporations Act be amended to provide extended powers for ASIC to ban individuals from the financial services industry.

Recommendation 8: The committee recommends that sections 913B and 915C of the Corporations Act be amended to allow ASIC to deny an application, or suspend or cancel a licence, where there is a reasonable belief that the licensee 'may not comply' with their obligations under the licence.

[58]      http://parlinfo.aph.gov.au/parlInfo/download/legislation/bills/r4689_first-reps/toc_pdf/11217b01.pdf;fileType=application%2Fpdf#search=%22legislation/bills/r4689_first-reps/0000%22

Section 913B(1)(b) now states: ASIC has no reason to believe that the applicant will not comply with is likely to contravene the obligations that will apply under section 912A if the licence is granted;

Section 915(C)(1)(aa) now states: ASIC has reason to believe that the licensee will not comply with is likely to contravene their obligations under section 912A;

Section 920A(1)(ba) now states: ASIC has reason to believe that the person will not comply with is likely to contravene their obligations under section 912A;

Section 920A(1)(d) now states: ASIC has reason to believe that the person is not of good fame or character; (This subsection had been repealed.)

Section 920A(1)(da) now states: ASIC has reason to believe that the person is not adequately trained, or is not competent, to provide a financial service or financial services;

Section 920A(1)(f) now states: ASIC has reason to believe that the person will not comply with is likely to contravene a financial services law.

[59]      Explanatory Memorandum, Corporations Amendment (Future of Financial Advice) Bill 2011, p. 22.

[60]      ASIC, Submission 51, p. 28.

[61]      Mr John Price, Senior Executive Leader, ASIC, Committee Hansard, 6 September 2011, p. 5.

[62]      ASIC, Submission 51, p. 22; see also ASIC, Submission 28, PJC inquiry into the Corporations Amendment (Future of Financial Advice) Bill 2011, pp. 7–8.

[63]      ASIC, Committee Hansard, 6 September 2011, p. 7.

[64]      ASIC, Submission 51, p. 31. Tier 1 products exclude most general insurance products, basic deposit products, consumer credit insurance, non-cash payment products and First Home Saver Account deposit accounts.

[65]      Mr John Price, Senior Executive Leader, ASIC, Committee Hansard, 6 September 2011, p. 9.

[66]      ASIC, Submission 51, pp 86–87.

[67]      Mr Greg Medcraft, Committee Hansard, 6 September 2011, p. 6.

[68]      Mr Michael D'Ascenzo, Commissioner, Australian Taxation Office, Committee Hansard, 23 September 2011, p. 33.

[69]      Mr Brett Peterson, Acting Deputy Commissioner Superannuation, ATO, Committee Hansard, 23 September, 2011, p. 34.

[70]      Mr Brett Peterson, Acting Deputy Commissioner Superannuation, ATO, Committee Hansard, 23 September, 2011, p. 35.

[71]      Mr Michael, D'Ascenzo, Commissioner, ATO, Committee Hansard, 23 September, 2011, p. 35.

[72]      Mr Michael, D'Ascenzo, Commissioner, ATO, Committee Hansard, 23 September, 2011, p. 36.

[73]      Received 4 November , 2011. Available at http://www.aph.gov.au/Parliamentary_Business/Committees/Joint/Corporations_and_Financial_Services/Completed_inquiries/2010-13/trio/submissions

[74]      Mr John Price, Senior Executive Leader, ASIC, Committee Hansard, 6 September 2011, p. 6.

[75]      Mr Keith Chapman, APRA, Committee Hansard, 30 August 2011, p. 38.

[76]      Mr Ross Jones, Deputy Chair, APRA, Committee Hansard, 30 August 2011, p. 36.

[77]      Mr Greg Brummer, General Manager Actuarial, Market and Insurance Risk Services, Supervisory Support Division, APRA, Committee Hansard, 30 August 2011, p. 39.

[78]      Mr Ross Jones, Deputy Chair, APRA, Committee Hansard, 30 August 2011, p. 39.

Chapter 5 - The views of the gatekeepers on the collapse of Trio Capital

[1]        Mr Greg Medcraft, Committee Hansard, Sydney, 6 September 2012, p. 1.

[2]        Mr John Lombard, Chief Executive Officer and Managing Director of the WHK Group, Committee Hansard, 4 November 2011, p. 3.

[3]        Mr John Lombard, Chief Executive Officer and Managing Director of the WHK Group, Committee Hansard, 4 November 2011, p. 3.

[4]        Mr John Lombard, Chief Executive Officer and Managing Director of the WHK Group, Committee Hansard, 4 November 2011, p. 2.

[5]        Mr John Gavens, Principal, Audit and Assurance, WHK, Committee Hansard, 4 November 2011, p. 2.

[6]        Mr John Gavens, Principal, Audit and Assurance, WHK, Committee Hansard, 4 November 2011, p. 5.

[7]        Mr John Gavens, Principal, Audit and Assurance, WHK, Committee Hansard, 4 November 2011, pp 2–3.

[8]        Mr John Gavens, Principal, Audit and Assurance, WHK, Committee Hansard, 4 November 2011, p. 3.

[9]        Mr John Lombard, Chief Executive Officer and Managing Director of the WHK Group, Committee Hansard, 4 November 2011, p. 2.

[10]      Mr John Gavens, Principal, Audit and Assurance, WHK, Committee Hansard, 4 November 2011, p. 6.

[11]      Mr John Lombard, Chief Executive Officer and Managing Director of the WHK Group, Committee Hansard, 4 November 2011, p. 2.

[12]      Mr John Lombard, Chief Executive Officer and Managing Director of the WHK Group, Committee Hansard, 4 November 2011, p. 7.

[13]     ASIC, 'Astarra Strategic Fund auditor prevented from auditing companies for three years', Media relase 12-22, 10 February 2012, http://www.asic.gov.au/asic/asic.nsf/byheadline/12-22MR+Astarra+Strategic+Fund+auditor+prevented+from+auditing+companies+for+three+years?openDocument (accessed 30 April 2012).

[14]      There was one reference in the opening paragraph to the submission being made to the 'Inquiry into the collapse of Trio Capital Limited'.

[15]      KPMG, Submission 69, p. 5.

[16]      KPMG, Submission 69, p. 5.

[17]      KPMG, Submission 69, p. 8.

[18]      KPMG, Submission 69, p. 9.

[19]      KPMG, Submission 69, p. 9.

[20]      KPMG, Submission 69, p. 15.

[21]      Auditing and Assurance Standards Board, 'The Auditor's responsibilities relating to fraud in an audit of a Financial Report', Auditing Standard ASA 240, June 2011.

[22]      Auditing and Assurance Standards Board, 'The Auditor's responsibilities relating to fraud in an audit of a Financial Report', Auditing Standard ASA 240, June 2011.

[23]      Auditing and Assurance Standards Board, 'The Auditor's responsibilities relating to fraud in an audit of a Financial Report', Auditing Standard ASA 240, June 2011.

[24]      Auditing and Assurance Standards Board, 'Special considerations in the audit of compliance plans of Managed Investment Schemes', Guidance Statement GS 013, http://www.auasb.gov.au/admin/file/content102/c3/GS_013_12-08-09.pdf

[25]      'Special considerations in the audit of compliance plans of Managed Investment Schemes', Guidance Statement GS 013, http://www.auasb.gov.au/admin/file/content102/c3/GS_013_12-08-09.pdf (accessed 2 April 2012).

[26]      On 2 April 2012, the committee wrote to the Chairman of the AUASB requesting the Board's response to the issues raised in KPMG's submission relating to ASA 240. The Chairman responded on 20 April 2012. The committee thanks her for her prompt response.

[27]      Response from Chairman of the Auditing and Assurance Standards Board, Ms Merran Kelsall, 20 April 2012.

[28]      Auditing and Assurance Standards Board, ASA 240: The Auditor’s Responsibilities Relating to Fraud in an Audit of a Financial Report: A chronology, received from the AUSSB on 20 April 2012.

[29]      Auditing and Assurance Standards Board, Auditing Standard ASA 240 The Auditor's Responsibilities Relating to Fraud in an Audit of a Financial Report, p. 11.  http://www.auasb.gov.au/search-result.aspx?search=ASA%20240 (accessed 27 April 2012)

[30]      Auditing Standard ASA 200, Objective and General Principles Governing an Audit of a Financial Report, Issued by the Auditing and Assurance Standards Board, June 2007, Paragraph 23, p. 10. http://www.auasb.gov.au/admin/file/content102/c3/Compiled_ASA_200_-_27_June_2007.pdf (accessed 30 October 2011)

[31]      KPMG, Submission 69, p. 14.

[32]      Response from Chairman of the Auditing and Assurance Standards Board, Ms Merran Kelsall, 20 April 2012.

[33]      Response from Chairman of the Auditing and Assurance Standards Board, Ms Merran Kelsall, 20 April 2012.

[34]      Response from Chairman of the Auditing and Assurance Standards Board, Ms Merran Kelsall, 20 April 2012.

[35]      ASIC, Submission 51, p. 45.

[36]      Mr Howard Insall, Chairman, Companies, Auditors and Liquidators Disciplinary Board, Answers to questions on notice, Response received 30 April 2012, p. 5.

[37]      Treasury, Options paper: a modernisation and harmonisation of the regulatory framework applying to insolvency practitioners, June 2011, pp 76–78.

[38]      See Mr Howard Insall, Chairman, Companies, Auditors and Liquidators Disciplinary Board, Committee Hansard, 4April 2012, p. 4.

[39]      The Trust Company, Submission 29, p. 3.

[40]      The Trust Company, Submission 29, p. 4.

[41]      The Trust Company, Submission 29, p. 4.

[42]      Mr Keith Chapman, Executive General Manager, Supervisory Support Division, Australian Prudential Regulation Authority, Committee Hansard, 30 August 2011, p. 41.

[43]      Financial Planning Association, Submission 46, p. 1.

[44]      Financial Planning Association, Submission 46, pp 9–10.

[45]      Financial Planning Association, Submission 46, p. 13.

[46]      Financial Planning Association, Submission 46, p. 1.

[47]      Financial Planning Association, Submission 46, p. 11.

[48]      Financial Planning Association, Submission 46, pp 13–35.

[49]      Mr Martin Codina, Policy Director, Financial Services Council, Committee Hansard, 30 August 2012, p. 31.

[50]      Financial Services Council, Submission 30, p. 4.

[51]      Financial Services Council, Submission 30, p. 5.

[52]      Mr Andrew Bragg, Senior Policy Manager, Financial Services Council, Committee Hansard, 30 August 2011, p. 30.

[53]      Mr Martin Codina, Director of Policy, Financial Services Council, Committee Hansard, 30 August 2011, p. 31.

[54]      Mr Ross Tarrant, Submission 35, p. 3.

[55]      Mr Ross Tarrant, Submission 35, p. 27.

[56]      Mr Ross Tarrant, Submission 35, p. 4.

[57]      Mr Ross Tarrant, Submission 35, p. 4.

[58]      Mr Ross Tarrant, Submission 35, p. 7.

[59]      Mr Ross Tarrant, Submission 35, p. 7.

[60]      Mr Ross Tarrant, Submission 35, p. 7.

[61]      ASIC, Submission 51, p. 72.

[62]      ASIC, Submission 51, p. 72. See also Mr Stephen Tudjman, Committee Hansard, 23 September 2011, p. 12.

[63]      Committee Hansard, 23 September 2011, p. 15.

[64]      ANZ, Submission 70, p. 5.

[65]      ANZ, Submission 70, p. 6.

[66]      National Australia Bank, Submission 72, p. 18.

[67]      National Australia Bank, Submission 72, p. 19.

[68]      ACSA, Submission 43, p. 3.

[69]      Mr Stephen Tudjman, General Counsel MLC, National Australia Bank, Committee Hansard, 23 September 2011, p.16.

[70]      ASIC, Submission 51, p. 79.

[71]      ASIC, Submission 51, p. 79.

[72]      The committee acknowledges the cooperation given to the inquiry by Mr Anthony Serhan, Chief Executive Officer of Morningstar.

[73]      Morningstar, Submission 33, p. 7.

[74]      Morningstar, Submission 33, p. 7.

[75]      Mr Anthony Serhan, Chief Executive Officer, Morningstar, Committee Hansard, 23 September 2011, p. 22.

[76]      Mr Anthony Serhan, Chief Executive Officer, Morningstar, Committee Hansard, 23 September 2011, p. 22.

[77]      Mr Anthony Serhan, Chief Executive Officer, Morningstar, Committee Hansard, 23 September 2011, p. 20.

[78]      'Blogger who blew the whistle on hedge fund', Sydney Morning Herald, 2 January 2010, http://www.smh.com.au/business/blogger-who-blew-the-whistle-on-hedge-fund-20100101-llq5.html (accessed 27 October 2011).

[79]      Dr J Drew and Professor M Drew, Ponzimonium: Madoff and the Red Flags of Fraud, Griffith Business School, Discussion Papers—Finance, No. 2010-07, p. 10.

[80]      'Blogger who blew the whistle on hedge fund', Sydney Morning Herald, 2 January 2010, http://www.smh.com.au/business/blogger-who-blew-the-whistle-on-hedge-fund-20100101-llq5.html (accessed 27 October 2011)

[81]      Mr Anthony Serhan, Chief Executive Officer, Morningstar Australasia, Committee Hansard, 23 September 2011, p. 23.

[82]      Mr Anthony Serhan, CEO, Morningstar, Committee Hansard, 23 September 2011, p. 24.

[83]      Mr Greg Medcraft, Chair, ASIC, at ASIC oversight hearing, Committee Hansard,
12 October 2011, p. 15.

[84]      Mr John Price, Senior Executive Leader, ASIC, at ASIC oversight hearing, Committee Hansard, 12 October 2011, p. 15.

[85]      Dr J Drew and Professor M Drew, Ponzimonium: Madoff and the Red Flags of Fraud, Griffith Business School, Discussion Papers – Finance, No. 2010-07, p. 10.

Chapter 6

[1]        ASIC, Investing between the flags – A practical guide to investing, http://www.moneysmart.gov.au/media/173788/investing-between-the-flags.pdf (accessed
27 October 2011)

[2]        Australian Securities and Investments Commission, 'Investing between the flags', Media Release No. 244, December 2009, http://www.asic.gov.au/asic/asic.nsf/byheadline/09-244MR+Investing+between+the+flags?openDocument (accessed 27 March 2012).

[3]        Ms Nicole McCann, Committee Hansard, Thirroul, 6 September 2011, p. 11.

[4]        Ms Sharon Bent, Committee Hansard, Thirroul, 6 September 2011, p. 16.

[5]        Ms Julia Fellows, Submission 12, p. 1.

[6]        Mr John Telford, Committee Hansard, Thirroul, 6 September 2011, p. 4.

[7]        Mr Warren Daley, Submission 22, p. 2.

[8]        Mr Norman Upton, Committee Hansard, Thirroul, 6 September 2011, p. 9.

[9]        Ms Nicole McCann, Committee Hansard, Thirroul, 6 September 2011, p. 11.

[10]      Mr Russell Smith, Committee Hansard, Thirroul, 6 September 2011, p. 2.

[11]      Mr Shayne Bonnie, Committee Hansard, Thirroul, 6 September 2011, p. 7.

[12]      Mr Nicholas McGowan, Committee Hansard, Thirroul, 6 September 2012, p. 17.

[13]      Mr Colin Warne, Submission 38, p. 2.

[14]      Name withheld, Submission 13, p. 1.

[15]      Mr Russell Smith, Submission 4, p. 1.

[16]      Mr Russell Smith, Committee Hansard, Thirroul, 6 September 2011, p. 3.

[17]      Mr Shayne and Mrs Tracey Bonnie, Submission 1, Supplementary Submission (b), p. 4.

[18]      Mr John Telford, Committee Hansard, Thirroul, 6 September 2011, p. 4. See also Mr John Telford, Submission 66, p. 1.

[19]      Name withheld, Submission 62, p. 2.

[20]      Ms Julia Fellows, Submission 12, p. 1.

[21]      Mr Rodney Denniss, Committee Hansard, Thirroul, 6 September 2011, p. 21.

[22]      Mr Rodney Denniss, Committee Hansard, Thirroul, 6 September 2011, pp 21–22.

Chapter 7

[1]        See Parliamentary Joint Committee on Corporations and Financial Services, Corporations Amendment (Future of Financial Advice) Bill 2011 and Corporations Amendment (Further Future of Financial Advice Measures) Bill 2011, February 2012, http://www.aph.gov.au/Parliamentary_Business/Committees/Senate_Committees?url=corporations_ctte/future_fin_advice/report/index.htm (accessed 20 April 2012).

[2]        Mr Michael D'Ascenzo, Commissioner, Australian Taxation Office, Committee Hansard, 23 September 2011, p. 33.

[3]        Name withheld, Submission 13, p. 1.

[4]        Mrs Fay Gammel, Submission 21, p. 4.

[5]        ASIC, Submission 51, p. 21.

[6]        Mr John Price, Senior Executive Leader, ASIC, Committee Hansard, 6 September 2011, p. 5.

[7]        Mr Ross Jones, Deputy Chairman, Committee Hansard, 30 August 2011, p. 38.

[8]        Mr Greg Medcraft, Chair, ASIC, Committee Hansard, 6 September 2011, p. 7.

[9]        KPMG, Submission 69, p. 12.

[10]      KPMG, Submission 69, p. 14.

[11]      ASIC, Submission 51, p. 77.

[12]      ASIC, Submission 51, p. 77.

[13]      ANZ, Submission 70, p. 3.

[14]      Mr Leigh Watson, General Manager of Asset Servicing, National Australia Bank, Committee Hansard, 23 September 2011, p. 14.

[15]      Mr Stephen Tudjman, General Counsel MLC, National Australia Bank, Committee Hansard, 23 September 2011, p.16.

[16]      Regulatory Guide 79, Managing conflicts of interest: An ASIC guide for research report providers.

[17]      ASIC, Submission 51, p. 63.

[18]      ASIC, Submission 51, p. 63.

[19]      Mr Greg Medcraft, Committee Hansard, 6 September 2011, p. 6.

[20]      Mr Greg Medcraft, Chairman, ASIC, Committee Hansard, Economics Legislation Committee, Estimates, 20 October 2011, p. 99.

[21]      Morningstar, Submission 33, p. 8.

[22]      Morningstar, Submission 33, p. 8.

[23]      Mr Shawn Richard, Answers to questions on notice, received 27 April 2012, p. 1.

Chapter 8

[1]        Stuart Washington, 'Flader link to father and son in $1 billion scam', Sydney Morning Herald, 25 January 2011, http://www.smh.com.au/business/flader-link-to-father-and-son-in-1b-scam-20110124-1a2v0.html (accessed 17 April 2012).

[2]        Tony Boyd, 'It's a joke , but no one's laughing', Australian Financial Review, 9 March 2012, p. 52.

[3]        Tony Boyd, 'It's a joke , but no one's laughing', Australian Financial Review, 9 March 2012, p. 52.

[4]        Mr Keith Chapman, ASIC, Executive General Manager, Committee Hansard, 30 August 2011, p. 39.

[5]        Mr Brett Manwaring, Director, Mr Mark Robinson, Partner PPB Advisory, Committee Hansard, 30 August 2011, pages 54–56.

[6]        Mr Brett Manwaring, Director, Mr Mark Robinson, Partner PPB Advisory, Committee Hansard, 30 August 2011, pages 54-56.

[7]        Mr Brett Manwaring, Director, Mr Mark Robinson, Partner PPB Advisory, Committee Hansard, 30 August 2011, pages 54-56.

[8]        Commander Peter Sykora, Manager of Crime Operations, Australian Federal Police, Committee Hansard, 4 April 2012, p. 25.

[9]        Commander Peter Sykora, Manager of Crime Operations, Australian Federal Police,  Committee Hansard, 4 April 2012, p. 25.

[10]      Commander Peter Sykora, Manager of Crime Operations, Australian Federal Police,  Committee Hansard, 4 April 2012, p. 26.

[11]      Mr John Lawler, Chief Executive Officer, Australian Crime Commission,  Committee Hansard, 4 April 2012, p. 19.

[12]      Mr John Lawler, Chief Executive Officer, Australian Crime Commission,  Committee Hansard, 4 April 2012, pp 22–23.

[13]      Australian Crime Commission, 'Serious and organised fraudulent investment scams', http://www.crimecommission.gov.au/publications/crime-profile-series-fact-sheet/serious-and-organised-fraudulent-investment-scams (accessed 11 May 2012).

[14]      AUSTRAC, Annual Report 2010–2011, Agency overview, p. 1.

[15]      ANZ, Submission 70, p. 8.

[16]      ANZ, Submission 70, pp 9–10.

[17]      IBISWorld, 'Superannuation Funds Management in Australia: A research report', April 2012, http://www.ibisworld.com.au/industry/default.aspx?indid=1890 (accessed 17 April 2012).

[18]      'Australian seniors warned of fraudsters increasingly targeting their $1.3 trillion superannuation', Courier Mail, 28 August 2011, http://www.couriermail.com.au/money/australian-seniors-warned-of-fraudsters-increasingly-targeting-their-13-trillion-superannuation/story-e6freqp6-1226123542266 (accessed 27 October 2011)

[19]      Australian Crime Commission, 'Serious and organised fraudulent investment schemes', Fact sheet.

[20]      ACSA, Submission 43, p. 3.

[21]      Mr Martin Codina, Policy Director, Financial Services Council, Committee Hansard, 30 August 2011, p. 30.

[22]      APRA, Submission 41, p. 8.

[23]      Mr Jeremy Cooper, Deputy Chair, ASIC, speech entitled Financial Statement Fraud: Corporate Crime of the 21^st Century, 8 June 2005

[24]      Mr Jeremy Cooper, Deputy Chair, ASIC, speech entitled Financial Statement Fraud: Corporate Crime of the 21^st Century, 8 June 2005, p. 14.

Chapter 9 - Concluding comments

[1]        Australian Government, 'A statistical summary of self-managed superannuation funds', Review into the governance, efficiency, structure and operation of Australia's superannuation system, December 2009, p. 15.

[2]        Mr Shawn Richard, Answers to questions on notice, received 27 April 2012, p. 7.

[3]        Draft Explanatory Memorandum, Superannuation Legislation Amendment (Further MySuper and transparency Measures) Bill 2012, p. 28. http://strongersuper.treasury.gov.au/content/exposure_drafts/super_legislation_amendment/downloads/Explanatory-Memorandum.pdf (accessed 27 April 2012).