The Supreme Court of New South Wales found Macquarie Investment Management (MIML) contravened the Corporations Act by failing to comply with its duties as a responsible entity of the fund.
The court has ordered that MIML pay a civil pecuniary penalty of $400,000, as well as $200,000 for ASIC’s legal costs.
ASIC commenced court action against MIML in June 2016 in relation to its oversight of the van Eyk Blueprint fund.
At the time, in an agreed statement of facts, MIML admitted the contraventions. ASIC and MIML filed joint statements as to the appropriate penalty.
The Supreme Court found MIML failed to comply with its duties as a responsible entity by:
- failing to exercise the degree of care and diligence that a reasonable person would exercise if they were in MIML’s position with respect to three investments totalling $30 million into Cayman Islands-based fund Artefact Partners Global Opportunities Fund (Artefact), between 6 July and 30 October 2012;
- allowing members to redeem or withdraw units from the VBI Fund when it was illiquid in contravention of the Corporations Act between 15 June 2013 and 9 September 2013; and
- failing to make adequate and timely enquiries in relation to van Eyk’s monitoring of the VBI Fund’s investment in Artefact between 18 February 2013 and 21 July 2014 (including not making adequate and timely enquiries as to why a full redemption from Artefact had not been paid between 1 January 2014 and 21 July 2014).
ASIC commissioner Greg Tanzer said: “This is a significant decision for investors and confirms the important role of responsible entities in monitoring and supervising funds, even where external managers are appointed.”
“ASIC will take action when responsible entities fail to meet those obligation,” he said.
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