Inquiry into the collapse of Trio Capital

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Inquiry into the collapse of Trio Capital

16 May 2012

© Commonwealth of Australia 2012
ISBN 978-1-74229-543-5

View the report as a single document - (PDF 3951KB)

View the report as separate downloadable parts:

Members of the Committee (PDF 30KB)
Duties of the Committee (PDF 29KB)
Abbreviations and key definitions (PDF 9KB)
Executive summary (PDF 38KB)

The issue of compensation
The Trio Capital fraud
Missed signals
ARP Growth Fund
The need for further investigation
Financial advisers
Auditors, custodians and research houses
Better disclosure by managed investment schemes
Self managed superannuation funds
Protecting Australians' superannuation savings

List of Recommendations (PDF 28KB)
Chapter 1 - Introduction (PDF 69KB)

Terms of reference
Conduct of the inquiry
Privilege issue
Scope of the inquiry
Cooper Superannuation Review
Other related inquiries
The role of APRA in relation to superannuation
Registrable Superannuation Entities
The role of the responsible entity
Dual regulated entities
Self managed superannuation funds

Chapter 2 - The structure, operation and collapse of Trio Capital (PDF 1482KB)

The structure and operation of Trio Capital
Mr Shawn Richard, Mr Jack Flader and the Trio fraud
The role of financial advisers
The collapse of Trio Capital and the regulatory response
A chronology of key events

Chapter 3 - The impact on Trio Capital investors and the issue of compensation (PDF 104KB)

The impact on investors
The emotional impact
Compensation arrangements for investors affected by fraud or misconduct
The government's compensation of Trio investors
A last resort compensation scheme
The committee's view on SMSF investor compensation

Chapter 4 - The view of the regulators on the collapse of Trio Capital (PDF 122KB)

The key regulatory and oversight institutions
The regulators' view of the Trio Capital collapse
Is some fraud inevitable?

Chapter 5 - The views of the gatekeepers on the collapse of Trio Capital (PDF 129KB)

WHK's view
KPMG's view
The Auditing and Assurance Standards Board's view
The Companies Auditors and Liquidators Disciplinary Board
The Trust Company
The views of the financial advisers and planners
The custodians' view
The view of research houses
Concluding comment

Chapter 6 - Investors' criticisms of the regulatory framework and the role of the regulators and gatekeepers (PDF 47KB)

Investors' criticism of SMSF framework
Investors' criticism of the regulators
Investors' criticism of the auditors
Investors' criticism of financial advisers

Chapter 7 - The 'expectation gaps' and some possible remedies (PDF 73KB)

Informing and protecting SMSFs
SMSFs and the role of financial advisers and planners
Australian Financial Services Licensing arrangements
The role of auditors
The role of custodians
The role of research houses
Better disclosure by managed investment schemes
Concluding comment

Chapter 8 - The need for further investigations to recover funds and prosecute wrongdoing (PDF 56KB)

Can ARP Growth Fund monies be recovered?
The investigations of Australian crime-fighting agencies into Trio
Is Australian superannuation an easy target?
Committee view

Chapter 9 - Concluding comments (PDF 34KB)

Compensation issues
Pursuing the funds and the criminals
The regulators
The responsible entity and the gatekeepers
Draft legislation to improve transparency of superannuation assets
A final note

Appendix 1 (PDF 11KB)
Answers to Questions on Notice
Additional information received
Appendix 2 - Public Hearings (PDF 10KB)

30 August 2011, Sydney
6 September 2011, Thirroul, NSW
6 September 2011, Sydney
22 September 2011, Canberra
23 September 2011, Sydney
4 November 2011, Canberra
4 April 2012, Sydney

Appendix 3 - Responses from Mr Shawn Richard* (PDF 2252KB)

*PDF Format Only

For further information, contact:

Committee Secretary
Parliamentary Joint Committee on Corporations and Financial Services
PO Box 6100
Parliament House
Canberra ACT 2600

Phone: +61 2 6277 3583
Fax: +61 2 6277 5719