Australian Court orders Theta Asset Management to pay $2M penalty
The Federal Court in Western Australia has ordered Theta Asset Management Ltd (In Liquidation) to pay a penalty of $2 million, after findings that the entity which is responsible for the Sterling Income Trust, violated the Corporations Act.
The Court determined that Theta and its Managing Director Mr Robert Marie contravened the Corporations Act on multiple occasions in authorising the issue of five defective Product Disclosure Statements for the Sterling Income Trust.
The Court ordered Mr Marie to pay a penalty of $100,000. Mr Marie will also be disqualified for four years from managing corporations. ASIC will not seek recovery of the penalty against Theta, as doing so would decrease the funds available for distribution by the Liquidator of Theta to its creditors.
The Australian Securities & Investments Commission (ASIC) launched proceedings against Theta and Mr Marie on December 11, 2019. The Court found that Theta breached the Corporations Act and failed to comply with its duties as a responsible entity. The Court also determined that Mr Marie contravened the Corporations Act and failed to comply with his duties as a managing director of Theta.
Theta and Mr Marie admitted the contraventions in a Statement of Agreed Facts and Admissions filed with the Court along with joint submissions for declarations, civil penalties and the disqualification order to be imposed.
The Hon Justice McKerracher noted in handing down his judgment that the circumstances involved catastrophic losses sustained by investors. In total, between 20 May 2016 to 30 April 2018, $16,749,974 was raised from retail investors pursuant to the defective Product Disclosure Statements.
ASIC’s investigation into conduct by entities and officers within the Sterling Group of companies continues.