Paul Fletcher (Bradfield, Liberal Party) Share this | Link to this | Hansard source

I am pleased to rise to speak on the recent report of the Parliamentary Joint Committee on Corporations and Financial Services into the collapse of Trio Capital. This report has found that over 6,000 Australia superannuation and other investors were defrauded of $176 million in the Trio scandal.

The committee began its inquiry last year on my suggestion after I was approached by a number of constituents who had lost money in the collapse of Trio. This fraud began in late 2003 when an existing reputable funds manager was taken over by those involved in the fraud, but it took almost six years before the regulators—the Australian Prudential Regulation Authority and the Australian Securities and Investments Commission—intervened to shut down Trio's operation.

It is very concerning that it took the regulators so long to act and it is equally concerning that it took some observations by an alert industry participant, Mr John Hempton of Bronte Capital, before the regulators were spurred into action. It is also concerning that APRA gave evidence to the committee that it had carried out a number of prudential reviews of Trio Capital between 2004 and 2009 but that none of these prudential reviews triggered the regulatory intervention which ultimately occurred—a point which was expressly conceded by officials of APRA before the committee.

The committee was surprised to discover that there is presently no ongoing criminal investigation into this fraud. One person has been jailed: Mr Shawn Richard. He appears to have been the local foot soldier of what was a scheme that appears to have been masterminded by an international criminal syndicate. Mr Jack Flader, a former US lawyer—formerly resident in Hong Kong and now believed to be resident in Thailand—is suspected of having been the mastermind. Mr Flader is known to have had a long involvement with securities fraud in other parts of the world.

A division having been called in the House of Representatives—

Federation Chamber adjourned at 13.14