On 13 December 2023, following a three-day hearing, the Federal Court made orders appointing Linda Smith and Robert Kirman of McGrathNicol as corporate receivers and managers of Australian Financial Services licensee, Brite Advisors Pty Ltd (Brite).
The receivers are tasked with conducting further investigations into Brite and the approximately AUD$1 billion client pension funds under its management.
The receivers are to provide a report to the Court and to ASIC on their investigation within 42 days.
The appointment of the receivers follows initial action taken by ASIC in October 2023 to secure interim asset preservation orders against Brite (23-286MR). The receivers were subsequently appointed by the Court as investigative accountants and provided a report to the Court on 8 December 2023.
In making the orders appointing receivers, the Court noted that the concerns raised by ASIC, and those raised by the Investigative Accountants, were both wide-ranging and serious, and required further detailed investigation.
Amongst the concerns is a significant variance in an amount of USD $69 million in client funds which had not been adequately explained by Brite. There are also significant concerns over the management of Brite.
The Court re-made asset preservation orders restraining Brite but enabling the receivers to carry on the operations of Brite. ASIC has taken these steps to protect client assets, and the management of those assets, on an ongoing basis, while the investigations continue.
