Watchdog expands superannuation insider trading probe

ASIC Commissioner Danielle Press says the regulator is probing 127 people over insider trading claims.

ASIC Commissioner Danielle Press says the regulator is probing 127 people over insider trading claims. Photo: AAP

The corporate watchdog has expanded a probe into insider trading within the superannuation industry after it was alleged executives moved their retirement savings before funds were devalued at the onset of COVID-19.

The Australian Securities and Investments Commission (ASIC) began looking into 67 super fund executives over the claims late last year, but last Friday revealed the scope had almost doubled to 127 people.

ASIC Commissioner Danielle Press told a parliamentary hearing that the regulator was also considering launching four formal insider trading cases.

The investigation stems from claims that some super executives moved their personal retirement savings before their fund publicly devalued its unlisted assets to reflect the COVID-19 economic crash in early 2020.

These assets, which include businesses like property and toll roads, are only revalued a few times a year.

This means fund executives are in a position to protect their personal nest eggs by using their inside knowledge of an impending devaluation to move out of affected fund allocations before the devaluation becomes public.

ASIC said last year that such allegations were serious and that it would investigate whether misconduct causing consumer harm had occurred.

Last Friday Ms Press confirmed there are four ongoing investigations.

An expanded probe is now looking at an additional 60 super employees who didn’t switch their assets but made other changes that ASIC thinks “are worth looking at”, Ms Press said.

“We wanted to make sure there wasn’t any inappropriate use of information,” she told a Parliamentary hearing last Friday.

“We broadened the scope to include a trustee who had changed their ongoing investment program.

“So they might have been in a balanced fund today and had changed all ongoing contributions to cash.”

ASIC refused to answer further questions about the investigation last Friday, saying it risked tipping people off to its intentions.

It comes after members of the House Economics Committee uncovered evidence last year that executives at large super funds switched their investment options when the pandemic started in 2020.

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