Another year, another headache
By
Kate Kachor
Mon 18 Jan 2010
It is less than one month into the year and things appear to be starting off no better than last year.
While the markets continue to regain strength, events that eerily mirror those surrounding failed advice firm Storm Financial may be enough to make hedge fund manager Astarra Asset Management the first corporate casualty of 2010.
In mid December 2009, ASIC issued stop orders against Astarra and associated firm Trio Capital.
Not long after these orders were made, Astarra was placed in liquidation and Trio Capital was placed in external administration.
Much has happened since December.
The mainstream media has been inundated with tales of Astarra executives allegedly misappropriating millions, of offshore accounts, of numerous links to collapsed international companies and a rival hedge fund manager with a penchant for blogging.
While hard evidence is yet to emerge over Astarra's wrongdoings, dealer groups with links to the firm may unfortunately be next in line to feel the heat.
Unconfirmed reports are claiming that a number of dealer groups were involved in marketing campaigns to shift existing clients' funds to the Astarra products.
Many of the firms in question are declaring any conversations they are having with the corporate regulator regarding Astarra as merely being informal chats, but the folks at ASIC don't appear to be ones for a quiet chat over a cuppa and an Iced Vo Vo.
One reader contacted IFA to express their concerns regarding the accountability of dealer groups linked to Astarra.
"Surely it is the dealer groups which also need to be accountable in this instance, particularly if these marketing campaigns were motivated by something else," the reader said.
"Surely these dealers wouldn't just throw away the basic principles of investing, that is, not putting your eggs in one basket?"
Does this reader have a point or have they missed the mark?
Is Astarra going to be the headache for dealer groups for 2010?
Or is it just negative hype?
Hopefully, for Australia's financial services industry, the issues surrounding Astarra are just a case of kids creating sparks while playing with matches and not the beginnings of an unstoppable inferno.
|
