After careful and extensive consideration, the Minister for Small Business and Assistant Treasurer, Kelly O'Dwyer MP, has advised two groups of investors in the now collapsed Trio Capital, that the Government will not provide further compensation.
The government has already provided $71.7 million in compensation to eligible investors.
The investor groups are made up of direct investors and Self Managed Super Fund (SMSF) trustees, and neither of these groups are covered by the compensation framework under the Superannuation Industry (Supervision) Act 1993 (SIS Act).
"Because they are not covered by the SIS Act, in good faith the Government considered whether there were any other relevant contributing factors to the losses suffered by these investors, which would call for compensation to be paid," Minister O'Dwyer said.
"The Government considered the action taken by the financial regulators, ASIC and APRA, and is satisfied that in relation to the collapse of Trio, both regulators carried out their roles and responsibilities appropriately, in accordance with the law and the regulatory framework."
Trio collapsed in 2009 and there have been five official reviews regarding Trio, or aspects of Trio's collapse over the last six years.
As a result of ASIC investigations, more than 13 people have been jailed, banned from providing financial services, disqualified from managing companies or have agreed to remove themselves from the financial services industry for a total of more than 50 years. As a result of APRA's investigations 13 people who were involved with Trio have entered into enforceable undertakings with APRA, which effectively remove these individuals from holding senior roles in the superannuation industry for a specified period of time.
"A third group of investors have been advised that the Government cannot consider the payment of compensation under the SIS Act, because no application for compensation has yet been made by the trustee of the superannuation fund," Minister O'Dwyer said.
"On behalf of the Government I wish to express my sympathies to all investors affected by the Trio collapse, and to acknowledge the significant financial and personal stress that the collapse has caused them and their families, including to those who lost their entire retirement savings.
"Although the recent Financial System Inquiry considered that Australia's financial system and regulatory architecture does not require wholesale change, the Government is further strengthening the financial system to improve consumer outcomes.
"The Government has also established the multi-agency Serious Financial Crime Taskforce to disrupt and deter financial crimes," Minister O'Dwyer said.