The claim has been placed against Theta Asset Management, an AFSL and responsible entity of Sterling Income Trust, along with Theta director Robert Patrick Marie.
According to ASIC, Theta and Mr Marie were responsible for authorising the issue of five product disclosure statements for the Sterling Income Trust, failing to ensure that each of them was not defective.
In particular, they were said to fail to ensure they did not contain misleading or deceptive statements and omissions in respect to statements and information required to be disclosed.
ASIC also stated that contrary to the compliance plan that Theta issued for the Sterling Income Trust, the entity:
- issued five defective product disclosure statements for the Sterling Income Trust;
- failed to take all steps necessary to effectively monitor the performance of Sterling Corporate Services Pty Ltd (SCS) as the investment manager of the Sterling Income Trust and satisfy itself that SCS had carried out its contractual obligations adequately;
- failed to identify, document, assess, evaluate and effectively manage and control all conflicts of interest; and
- failed to ensure all financial statements of the Sterling Income Trust were completed and available for audit within two months of the relevant period and were lodged with ASIC on or before the lodgement date.
In total, between 20 May 2016 and 30 May, $16,749,974 was raised from retail investors pursuant to the alleged defective product disclosure statements.
ASIC is seeking declarations of breach against Theta and Mr Marie for various alleged breaches of the responsible entity and director’s duties provisions of the Corporations Act 2001.
It has specified that they failed to exercise appropriate care and diligence when issuing each of the relevant product disclosure statements.
The regulator is also seeking civil penalties against Theta and Mr Marie and an order banning Mr Marie from managing corporations for such period as the court deems fit.
The alleged breaches of section 601FC of act by Theta and breaches of 601FD by Mr Marie are said to each carry a maximum possible pecuniary penalty of $200,000.
Of the 101 consumers who entered into Sterling New Life Leases, 63 of the lessees invested in the Sterling Income Trust to generate funds to cover their rental expenses under such leases.
The remaining 38 lessees did not invest in the trust, rather they invested in preference shares offered by companies within the Sterling Group.
ASIC reported its investigation into conduct by other entities and officers within the Sterling Group of Companies is ongoing.
Sarah Simpkins
Sarah Simpkins is a journalist at Momentum Media, reporting primarily on banking, financial services and wealth.
Prior to joining the team in 2018, Sarah worked in trade media and produced stories for a current affairs program on community radio.
You can contact her on [email protected].
