The chair of the House economics committee has referred cases of “quasi-insider trading” by industry super funds to ASIC, accusing fund executives of profiting from fluctuating unlisted asset valuations during the COVID crisis.
During last Friday’s bombshell public hearing of the standing committee on economics, Mr Wilson also grilled ASIC on whether it would investigate a number of cases of super fund executives potentially misusing their positions to gain advantage during a period of heightened volatility.
“Earlier in the year there was a bottoming-out of the Australian stock exchange as a consequence of COVID-19, then there was a delayed period where in many cases super funds had unlisted assets for revaluation and that it enabled people to move money from within funds based on knowledge or inside information to potentially profit,” Mr Wilson said.
“This seems to me to be quasi-insider trading.”
Mr Wilson noted that his demands for information on the switching behaviour of executives and trustees had mostly fallen on deaf ears, but acknowledged that one fund – Care Super – took steps to prevent conflicts through a “blackout period” while keeping investment choices under wraps.
“UniSuper has admitted that one member who is also an executive of the fund had one or more switch requests processed during the high and low periods of their fund to a value of $445,368,” Mr Wilson said, noting that AustralianSuper had also seen one of its executives do a transaction during the period.
Cbus also refused to provide information, while NGS Super admitted that three trustees did “major transactions” during the period. Similar behaviour occurred at Rest.
“You can see the pattern of behaviour,” Mr Wilson said.
“You have people who are trustees or managers of funds transacting huge sums of money within a defined period where it’s known that the stock market may not have reached bottom – we have to concede that – but has dropped considerably while they haven’t revalued their unlisted assets and therefore may be able to secure a benefit.”
Commissioner Danielle Press said that ASIC would take the examples away and determine whether they were worth investigating.
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