ASIC drops charges against two former LM heads
The Australian Securities and Investments Commission (ASIC) has dropped charges against two former directors of the collapsed Gold Coast-based fund manager, LM Investment Management (LMIM), Simon Tickner and Lisa Darcy, while proceedings continued against Pater Drake, Maree Mulder and Eghard van der Hoven.
ASIC launched its civil penalty proceedings against former fund manager directors in 2014, seeking financial penalties and banning orders as well as the disqualification of Drake and former directors from managing companies and providing financial services.
The claims against Tickner and Darcy were related to their conduct in 2011 as directors in signing off a loan to Maddison Estate, which was at that time owned and controlled by Drake, while the proceedings against other directors focused on both 2011 transaction and another transaction that occurred in 2012.
According to ASIC, Drake had used his position to gain an advantage for himself while the other directors breached their duties for failing to "act with the proper degree of care and diligence" regarding transactions involving the LM managed performance fund (MPF), which had loaned funds to Maddison Estate.
Between 2008 and 2012, several loans using MPF funds helped increase Maddison's total loan limit from $40 million to $280 million, which included the loan extension from $115 million to $180 million in 2011 and from $180 million to $280 million in 2012.
Additionally, by the time LMIM entered into administration, no construction work had commenced on the development and none of the proposed housing lots had been sold, although a development approval had been procured and come preliminary land clearing had taken place.
LMIM was the responsible entity for seven registered managed investment schemes and the trustee of MPF, unregistered managed investment scheme with about 4,500 investors. More than $400 million was invested in MPF and LMIM was responsible for managing at least $800 million.
On 12 September, ASIC discontinued its claim against directors in relation to the 2011 transaction but the proceeding related to the 2012 transaction continues against Drake, Mulder and van der Hoven and has been adjourned until 23 September.
AUTHOR
Oksana Patron
Recommended for you
ASIC data shows the number of smaller AFSLs with less than $50 million in revenue has increased by 25 per cent in the past year, but the regulator believes they are still under reporting breaches.
Former financial adviser and Coalition backbencher Bert van Manen has introduced a bill in Parliament, building on Michelle Levy’s good advice duty and calling for SOAs to be scrapped.
Following its recent partnership with Otivo, Colonial First State has now announced an arrangement with Viridian Advisory to offer unadvised members with one-off, topic-based financial advice.
Insignia Financial has made four appointments, including three who have joined from TAL, to lead strategy and innovation in its retirement solutions for the MLC brand.
