Australian regulator drops case against two LM Investment Mgmt directors

Australian regulator drops case against two LM Investment Mgmt directors

The Australian Securities & Investments Commission has discontinued its case against two former directors of LM Investment Management.

In a statement on its website today, the ASIC said it was dropping its case against Simon Tickner and Lisa Darcy, which it had begun in 2014. It had initiated the action in the form of civil penalty proceedings in the Federal Court of Australia, through which it sought financial penalties and banning orders following the collapse of the Gold Coast, Queensland-based, ASIC-regulated LMIM in 2013.

Tickner and Darcy had been named in the proceedings alongside LMIM founder Peter Drake and two other former directors, Francene Maree Mulder and Eghard van der Hoven.

In today’s statement, the ASIC said: “The claims against Mr Tickner and Ms Darcy focused on their conduct as directors in signing off a loan to Maddison Estate Pty Ltd, which Mr Drake owned and controlled, in 2011. Proceedings against the other directors focused on both the 2011 transaction and another transaction that occurred in 2012.

“The trial commenced on 29 August 2016. On 12 September 2016, after the close of its case, ASIC discontinued its claim against all directors in relation to the 2011 transaction.

The proceeding related to the 2012 transaction continues against Mr Drake, Ms Mulder and Mr van der Hoven and has been adjourned until 23 September 2016 for closing submissions.”

LM Investment Management was a fund management company popular with many English-speaking, expat-focused financial advisers in such markets as Hong Kong, Thailand and Malaysia, which filed for administration at the end of March, 2013. At this point its popular Managed Performance Fund was reported to hold assets under management of approximately A$396.6m (£222.3m).

Investors have been told that they are likely to receive no more than 5p for every £1 invested in LMIM.

Just before LMIM went into administration, it opened an office in London, and obtained authorisation from the Financial Services Authority and for a brief time, was authorised by the FSA’s successor, the Financial Conduct Authority, a fact which could prove important for investors not just in the UK but elsewhere in Europe.

As reported, an Asia-based group of expat investors who lost their savings in the collapse of LMIM announced earlier this year that they were planning to seek redress through the UK courts, and were working with Harcus Sinclair, a London Law firm, and Capital Interchange, a litigation funding broker.