Business News

No further compo for Trio victims

The federal government has announced no further compensation will be provided to two groups of investors in the collapsed Trio Capital group.

In a statement issued last Friday, Assistant Treasurer Kelly O’Dwyer said the government had concluded that the Australian Securities and Investments Commission (ASIC) and Australian Prudential Regulation Authority (APRA) had carried out their roles and responsibilities appropriately in regards to the group’s collapse.

Subsequently, no further compensation would be offered to the groups, who were made up of direct investors and SMSF trustees, O’Dwyer said.

The collapse of Trio in 2009 took a total $176 million from nearly 6900 investors.

The Parliamentary Joint Committee (PJC) on Corporations and Financial Services inquiry into the scandal noted 5400 of the investors who invested in Trio through APRA-regulated super funds received compensation totalling nearly $55 million.

In addition, 285 investors were in SMSFs and were ineligible for compensation, as there is no statutory safety net for SMSFs in the event of a fraud under the Superannuation Industry (Supervision) (SIS) Act.

The PJC inquiry found most SMSF investors were unaware of the risks associated with SMSFs.

O’Dwyer said a third group of investors had also been advised the government could not consider compensating them under the SIS Act as no application for compensation had yet been made by the trustee of their super fund.

“On behalf of the government I wish to express my sympathies to all investors affected by the Trio collapse and to acknowledge the significant financial and personal stress that the collapse has caused them and their families, including to those who lost their entire retirement savings,” she said.

“Although the recent Financial System Inquiry considered that Australia’s financial system and regulatory architecture do not require wholesale change, the government is further strengthening the financial system to improve consumer outcomes.

“The government has also established the multi-agency Serious Financial Crime Taskforce to disrupt and deter financial crimes.”

There have been five official reviews of Trio or aspects of its collapse in the past six years.

As a result of ASIC investigations into the collapse, more than 13 people have been jailed, banned from providing financial services, disqualified from managing companies or have agreed to leave the financial services industry for a total of more than 50 years.

APRA’s inquiries led to 13 people involved with Trio entering into enforceable undertakings, effectively removing these people from holding senior roles in the super industry for specified periods of time.

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