Government rejects more Trio payouts

Direct and SMSF investors caught up in Trio's collapse will not be compensated.

04-Apr-2016

By Sarah Kendell

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The government has announced it will not be providing any further compensation in the case of two groups of investors in the collapsed Trio Capital.

In a statement to media on Friday, Assistant Treasurer Kelly O’Dwyer said the government had concluded that ASIC and the Australian Prudential Regulation Authority (APRA) had acted appropriately in relation to the fund manager’s collapse.

As a result the two groups, comprising direct investors and self-managed superannuation trustees not covered by the Superannuation Industry (Supervision) Act 1993 (SIS Act), would not receive compensation.

“The government considered the action taken by the financial regulators…and is satisfied that in relation to the collapse of Trio, both regulators carried out their roles and responsibilities appropriately, in accordance with the law and the regulatory framework,” O’Dwyer said.

A third group of investors had also been advised that the government could not consider compensating them under the SIS Act, because no application for compensation had been made by the trustees of their super fund.

“On behalf of the government I wish to express my sympathies to all investors affected by the Trio collapse, and to acknowledge the significant financial and personal stress that the collapse has caused them and their families, including to those who lost their entire retirement savings,” O’Dwyer said.

“Although the recent Financial System Inquiry considered that Australia’s financial system and regulatory architecture do not require wholesale change, the government is further strengthening the financial system to improve consumer outcomes.

“The government has also established the multi-agency Serious Financial Crime Taskforce to disrupt and deter financial crimes.”

There have been five official reviews of Trio, which collapsed in 2009, or aspects of its collapse over the last six years.

As a result of ASIC investigations into the collapse, more than 13 people have been jailed, banned from providing financial services, disqualified from managing companies or have agreed to leave the financial services industry for a total of more than 50 years.

APRA's inquiries led to 13 people involved with Trio entering into enforceable undertakings, effectively removing these people from holding senior roles in the super industry for specified periods of time.

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