• Home
  • News
    • People moves
    • Africa
    • Asia
    • Australia
    • Canada
    • Caribbean
    • Domicile
    • Europe
    • Latin America
    • North America
    • Middle East
    • US
    • US
    • UK
  • Products
    • Funds
    • Pensions
    • Platforms
    • Insurance
    • Investments
    • Private Banking
    • Citizenship
    • Taxation
  • Fintech
  • Regulation
  • ESG
  • Expats
  • In Depth
  • Special Reports
  • Directory
  • Video
  • Advertise with us
  • Directory
  • Events
  • European Fund Selector
  • Newsletters
  • Follow us
    • Twitter
    • LinkedIn
    • Newsletters
  • Advertise with us
  • Directory
  • Events
    • Upcoming events
      event logo
      International Investment Nordic Forum 2021

      International Investment is delighted to announce the 2021 International Investment Nordic Forum which will take place on Tuesday March 9, at 9am (GMT). This curated virtual event will be broadcast live and will feature a series of fund manager interviews and presentations, as well as interviews with some of the Nordic regions top fund selectors.

      • Date: 09 Mar 2021
      • ONLINE, ONLINE
      View all events
  • European Fund Selector
International Investment
International Investment

Sponsored by

Sharing Alpha
  • Home
  • News
  • Products
  • Fintech
  • Regulation
  • ESG
  • Expats
  • In Depth
  • Special Reports
  • Video
  • Investments

LM Investment M’gmt directors ‘did not breach their directors’ duties’: Australia court

LM Investment M’gmt directors ‘did not breach their directors’ duties’: Australia court
  • Helen Burggraf
  • 23 December 2016
  • Tweet  
  • Facebook  
  • LinkedIn  
  • Send to  

Peter Charles Drake and two of his fellow directors  “did not breach their duties as directors of LM Investment Management”, Australia’s Federal Court ruled on Friday, in response to a case brought by Australia’s financial services regulator. the Australian Securities & Investments Commission.

The ruling is likely to come as a disappointment to many thousands of out-of-pocket investors in the funds LM Investment Management (LMIM) marketed, mainly in Australia and Asia.

Related articles

  • Australian regulator drops case against two LM Investment Mgmt directors
  • LM Investment Mgmt victims to seek redress via UK
  • Australia turns up heat on best interests duty violators with A$1m penalty
  • Aussie regulator takes first-ever ‘best interests’ action

The defeat was described by The Australian newspaper as a “humiliating defeat for the Australian Securities & Investments Commission”, as well as one that was also “likely to further dent Australia’s reputation as a safe place to invest”, as it wiped out “nearly all of the A$800m (£467.3m)” investors had entrusted LMIM with.

ASIC will also be stuck with having to pay the court costs of the defendants, according to the publication.

As reported,  LMIM was a fund management company popular with many English-speaking, expat-focused financial advisers in such markets as Hong Kong, Thailand, Malaysia and the United Arab Emirates, which filed for administration at the end of March, 2013. At that point its popular Managed Performance Fund (MPF) was reported to hold assets under management of more than A$400m (£234.8m).

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

In a statement released on Friday,   ASIC said it was “reviewing the Court’s decision, and has no further comment at this time”.

In its court action, ASIC had alleged that LMIM founder Drake “had used his position to gain an advantage for himself, and that each of the former directors of LMIM had breached their director’s duties by failing to act with the proper degree of care and diligence regarding transactions involving the LM Managed Performance Fund (MPF), an unregistered managed investment scheme with about 4,500 investors”, ASIC said. The other two directors mentioned in ASIC’s case and also found not to have breached their directors’ duties by the Federal Court were and Francene Maree Mulder and Eghard van der Hoven.

As reported, ASIC’s claim against two other directors, Simon Ticker and Lisa Darcy, was dismissed in September.

LMIM was the responsible entity for seven registered managed investment schemes as well as the trustee for MPF.  According to ASIC,  LMIM was responsible for managing at least A$800m on behalf of approximately 12,000 investors in Australia and overseas.

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.

‘Surprised, shocked and appalled’

Two Thailand-based LMIM investors contacted by International Investment expressed disappointment with the Australian Federal Court decision, with one saying he was “surprised, shocked and appalled”.

Another, who requested anonymity, said: “Honestly, this can only open the question that has been in all of our minds: Have ASIC really only sought a route to endorse their earlier in-action?

“We believe the LM MPF was heavily mis-sold, that its marketing documents led their readers vastly astray, and we can find no evidence that the promised returns to investors were paid from anything other than new investors’ monies for at least five years.

The danger is that the industry will see this result as condoning behavior in Australia that is unacceptable throughout developed nations across the world.”

This story was updated on 25 December 2016.

  • Tweet  
  • Facebook  
  • LinkedIn  
  • Send to  
  • Topics
  • Investments
  • Asia
  • Rest of World
  • LM Investment Management

More on Investments

US female investors reluctant to pay a financial adviser - report

  • Investments
  • 18 February 2021
Jersey regulator says new Woodford firm has not applied for authorisation

  • Investments
  • 18 February 2021
CISI launches anti-money laundering partnership with Qatari regulator

  • Regulation
  • 16 February 2021
Cyprus tells investment summit it's in 'prime position' for EU markets access

  • Investments
  • 05 February 2021
EFAMA urges 12-month extension to implenting new PRIIPS rules

  • Regulation
  • 04 February 2021
Back to Top

Most read

EU removes Barbados from blacklist of 'non-cooperative' jurisdictions
EU removes Barbados from blacklist of 'non-cooperative' jurisdictions
Global UHNWI population to grow by 27% over the next five years: Knight Frank
Global UHNWI population to grow by 27% over the next five years: Knight Frank
J.P. Morgan Asset Management launches Global Income Sustainable Fund
J.P. Morgan Asset Management launches Global Income Sustainable Fund
Comment: Four key issues powering the renewable energy revolution
Comment: Four key issues powering the renewable energy revolution
Aviva announces exit from Turkey
Aviva announces exit from Turkey
  • Contact Us
  • Marketing solutions
  • About Incisive Media
  • Terms and conditions
  • Policies
  • Careers
  • Twitter
  • LinkedIn
  • Newsletters

© Incisive Business Media (IP) Limited, Published by Incisive Business Media Limited, New London House, 172 Drury Lane, London WC2B 5QR, registered in England and Wales with company registration numbers 09177174 & 09178013

Digital publisher of the year
Digital publisher of the year 2010, 2013, 2016 & 2017
Loading