An Australian Madoff? Trio Capital, an Australian fund manager, has been ordered to wind up
its funds after being unable to account for $123 million in its Astarra fund since investigations began in October. The fund "has a total of $426 million under management - including superannuation
savings of about 10,000 Australians." Some worry what this means for more potential frauds in Australia's "privatized social security."
The Syndey Morning Herald has more: the initial scrutiny
, the whistleblower
, the fears
, hope fades
John Hempton, blogger
and hedge fund manager based in Australia, notified the Australian Securities and Investments Commission (ASIC) in September. He outlined his story of delving into the problems in a January post
, explaining to non-Australians how the Superannuation system (privatized Social Security) makes this fraud a significantly bigger story.
Dominck McCormick, the fund manager who initially tipped Hempton, has written a fantastic summary
of what red flags existed, the role of due diligence, and how the financial planning industry can move forward.
Hempton has an eye for frauds. He previously tussled with hedge fund Ponta Negra, whose manager recently plead guilty
to defrauding investors. Ponta Negra shared an office and marketer with Paradigm Global, a fund of hedge funds owned by the son and brother of U.S. Vice President Joe Biden. Hempton had found connections
between Paradigm and other questionable funds. This included several connections to eccentric Allen Stanford's Stanford Financial Group
, which remains frozen and under investigation for fraud. Hempton first investigated Astarra because of its connections
Other links at Hempton's blog discussing Astarra: Astarra Marketing
, Submission to the Superannualtion review
discussing industry structure and regulations, The Regulator's Culpability
, Debating accusations of jealousy
(Hempton was previously linked to
on the blue for an interesting index proposal