Sterling First licenser fined $2m

The Federal Court has found Sydney-based Theta Asset Management contravened federal law by issuing defective product disclosure statements for now-defunct investment group Sterling First.

The Australian Securities and Investment Commission initiated court action against TAM, which is under liquidation, and its managing director Robert Marie over the matter in December of last year.

The Court found that TAM and Mr Marie had failed to ensure the five statements in question did not contain misleading or deceptive statements, or omissions otherwise required to be disclosed.

More than $16 million was raised from retail investors, pursuant to the defective disclosure statements, between 2016 and 2018.

Presiding judge Neil McKerracher found both TAM and Mr Marie had contravened the Corporations Act and ordered them to pay $2 million and $100,000, respectively.

ASIC said it will not attempt to recover the penalty against TAM, as doing so would decrease available funds to be distributed by its liquidator.

Mr Marie has been disqualified for four years from managing corporations.

TAM's financial services license was suspended in January.

ASIC commissioner Cathie Armour said the outcome was an important deterrent to other responsible entities to ensure they complied with their legal obligations.

“ASIC will take action to hold gatekeepers to account,” she said.

Sterling First entered into administration in 2019, with ASIC claiming 101 people were impacted by the collapse.

ASIC has said its investigation into the group remains ongoing.