Australian financial dispute resolution body provides information to Sterling Group investors
AFCA says it has received some complaints about the Sterling Income Trust against two financial firms that are AFCA members.
The Australian Financial Complaints Authority (AFCA) has earlier today provided information to Sterling Group investors.
Let’s recall that the Sterling Income Trust (SIT) has triggered regulatory concerns for several years. In September 2017, ASIC issued a stop order on Product Disclosure Statements issued by Theta Asset Management Ltd (Theta). The stop order was due to concerns about Product Disclosure Statements for Sterling Income Trust (SIT), including inadequate disclosure of risks and conflicts of interests, omission of material information about the investment, presentation of prospective information about target returns, and outdated and incorrect references.
Upon becoming aware in December 2018 that some further funds were being received by the Sterling Group from Sterling New Life Lease tenants/ investors for investments in Redeemable Preference Shares, ASIC took immediate steps to require this to stop. Following enquiries by ASIC in April 2019, the Board of Directors of the Holding company of the Sterling Group appointed Martin Jones and Wayne Rushton of Ferrier Hodgson as Voluntary Administrators on May 3, 2019.
In June 2019 most of the companies in the Sterling group entered into liquidation.
AFCA says it has received some complaints about the SIT against two financial firms that are AFCA members. Those financial firms have been involved in the operation, management and promotion of the SIT and some other Sterling Group investments. Currently, those financial firms are not in liquidation.
Consumers who believe they have received incorrect or misleading information about the SIT or other Sterling Group investments from a financial firm, or representative of a financial firm, which is a current AFCA member, can lodge a complaint against the financial firm.
ASIC has identified AFCA as a key avenue of assistance for investors seeking compensation.
As per information provided by ASIC in July this year, the regulator received over 100 letters regarding Sterling Group demanding $26 million in compensation to investors who suffered losses resulting from investments promoted by the Sterling group of companies.
ASIC said back then it was unable to directly make funds available for the compensation of investors who suffered losses.
However, ASIC has prioritised this matter so that it can take appropriate court action against those responsible, where there has been a breach of the laws it administers (such as the Corporations Act).
