ASIC, Compliance, SMSF

SMSF investment firm to be wound up

SMSF investment firm Brite Advisors ASIC Federal court wind-up

The Federal Court has order the winding up on an SMSF investment firm which offered services to SMSF and pension scheme members in four countries amid concerns over missing assets.

An SMSF investment firm that failed to file financial statements and an auditor’s report has been ordered by the Federal Court to be wound up following an application by the Australian Securities and Investments Commission (ASIC).

At a hearing on 6 February, the court ordered Brite Advisors be wound up on just and equitable grounds and appointed Linda Smith and Robert Kirman of McGrath Nicol as liquidators to the firm  and as receivers and managers over the property, assets and undertakings it held on trust for others.

The winding-up order follows previous court proceedings brought by ASIC, which was successful in October last year in obtaining an interim court order to freeze the assets and funds of Brite Advisors.

At the time, the corporate watchdog stated the financial position of the firm was unknown due to its failure to lodge the statements and auditor’s report for the financial year ended 30 June 2022, while the value of funds under management had not been reported by any entity within the Brite Group since December 2019.

The appointment of Smith and Kirman follows previous court appointments to Brite Advisors as investigative accountants in November 2023 and as receivers and managers on 13 December 2023.

At the most recent hearing, a report lodged with the court in late January found Brite Advisors was likely insolvent from around the time ASIC commenced proceedings against the firm in late October 2023.

An earlier report lodged in December last year found a US$69 million variance between the amount Brite Advisors told its clients and their beneficiaries it held on their behalf – US$682 million – and the amount identified by the investigative accountants as being held in its financial institutions’ accounts – US$612.9 million.

Asset preservation orders obtained by ASIC in October 2023 were continued, but amended so they do not prevent the liquidators and receivers and managers from carrying out their court-appointed functions.

Brite Advisors operated in multiple countries, including the United Kingdom, United States, Hong Kong and Australia, providing advisory, pension administration and asset management services and an investment platform to self-invested personal pension providers, qualified recognised overseas pension schemes and SMSFs.

ASIC stated its investigation, which is ongoing, has been assisted by the US Securities and Exchange Commission, UK Financial Conduct Authority, Gibraltar Financial Services Commission and Hong Kong Securities and Futures Commission.

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