The Federal Court has appointed receivers to Brite Advisors as the investigation into the $1 billion client funds managed by the advisory group continues.
The Australian Securities and Investments Commission launched an investigation into Brite Advisors, after it failed the lodge financial statements and auditors report for the 2021-22 financial year.
After escalating the matter to the Federal Court of Australia’s Western Australian registry, Justice Patrick O’Sullivan appointed McGrathNicol partners Linda Smith and Robert Kirman as receivers and managers of Brite Advisors.
Justice O’Sullivan’s decision comes after a three-day hearing in the Federal Court.
Brite Advisors operate advisory, pension administration, and asset management services around the world and manages about $US682 million or $A1 billion client pension funds, ASIC said.
"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," the corporate watchdog said in a statement.
"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."
Under court orders, Brite Advisors will give up its books, records, computer records, and data to the receivers.
The federal court granted ASIC’s request to freeze Brite Advisors’ assets in October.
According to ASIC, the value of Brite’s funds under management has not been reported in an audited balance sheet since December 2019.
The receivers have 42 days to provide a report to court and to ASIC.
