Federal Court appoints receivers to uncover $1bn from global advisory group
The Federal Court has appointed two corporate receivers of Brite Advisors to investigate the $1 billion client pension funds under its management.
On 27 October 2023, global advisory firm Brite Advisors was ordered by the Federal Court to freeze its funds and assets for failing to lodge financial statements.
The firm provides advisory, pension administration and asset management services to clients in Australia, the UK, the US, Switzerland and Hong Kong and also offers an investment platform to self-invested personal pension providers and self-managed super funds (SMSFs).
The Federal Court has since chosen Linda Smith and Robert Kirman of McGrathNicol as corporate receivers and managers of Brite Advisors’s Australian financial services licensee (AFSL).
The receivers are tasked with conducting further investigations into Brite and the approximately $1 billion client pension funds under its management. They are to provide a report to the Court and to ASIC on their investigation within 42 days.
“In making the orders appointing receivers, the Court noted that the concerns raised by ASIC, and those raised by the Investigative Accountants, were both wide-ranging and serious, and required further detailed investigation,” the statement said.
“Amongst the concerns is a significant variance in an amount of USD $69 million in client funds which had not been adequately explained by Brite. There are also significant concerns over the management of Brite.”
The regulator initially applied for the orders for Brite Advisors because it was concerned:
- The current financial position of Brite is unknown, as Brite has failed to lodge with ASIC its financial statements and auditors report for the financial year ended 30 June 2022; and
- The value of Brite’s funds under management has not been reported by any entity within the Brite Group in an audited balance sheet since December 2019.
The Court re-made asset preservation orders restraining Brite but enabling the receivers to carry on the operations of Brite. ASIC has taken these steps to protect client assets, and the management of those assets, on an ongoing basis, while the investigations continue.
ASIC’s investigation is ongoing.
AUTHOR
Jasmine Siljic
Recommended for you
Money Management examines the share price of financial advice licensees over one year to 31 March, with M&A actions in the final quarter having a positive effect for two licensees.
A $3.5 million settlement for victims of Melissa Caddick has been approved by the Federal Court following an initial agreement last December.
The Reserve Bank of Australia has delivered its first rate decision since the introduction of a new board structure last month.
Digital advice provider Otivo has launched an interactive tool, powered by artificial intelligence and Otivo’s own advice engine, to help answer client questions.
