ASIC has said it will investigate controversial switching behaviour by a number of super trustees and executives and has revealed more details around its planned year-end litigation blitz.
Standing committee chair Tim Wilson questioned whether super fund executives moving money within funds at the height of the March-April market volatility qualified as “quasi-insider trading” and called on ASIC to investigate the claims after a number of funds declined to provide him with more detail.
“It is not ASIC’s practice to comment on whether it has formally commenced an investigation or make public comment about the progress of investigations,” ASIC said.
“But we confirm that we are considering the material supplied and what further action might be appropriate for ASIC to take in accordance with our usual practices upon the receipt of intelligence. We also note that investigations of matters such as breach of directors duties and market misconduct can take some time.”
The switching behaviour occurred during a period when funds were poised to revalue their unlisted assets. Three trustees from NGS Super did “major transactions” while one Rest executive transacted $465,949.
“You can see the pattern of behaviour. We have people who are trustees or managers of funds transacting huge sums of money within a defined period, where it's known that the stock market may not have reached bottom — we have to concede that — but had dropped considerably while they hadn't revalued their unlisted assets and therefore may have been able to secure a benefit,” Mr Wilson said.
ASIC also revealed that it was planning to launch a litigation blitz before Daniel Crennan QC left the corporate regulator.
“In the period from 23 October 2020 through to 31 December 2020, ASIC expects to file approximately 15 civil cases. During this time, ASIC also expects to refer approximately 20 briefs of evidence to the CDPP relating to approximately 25 individuals or companies,” ASIC said.
“Approximately 10 individuals or entities will be referred for administrative action. These outcomes are subject to evidentiary requirements being met and the availability of external resources such as legal counsel and experts.”
However, it remains unclear whether the regulator will be able to proceed with its timeline in the absence of Mr Crennan, who was brought in specifically to handle a number of cases referred to it in the aftermath of the royal commission.