A TOOTHLESS regulator’s inaction may have led to more people being embroiled in an investment scam affecting 100 Perth residents, including people from Baldivis and Secret Harbour.
The residents invested with Sterling First which offered an alternative to retirement village accommodation.
The proposed scheme enabled a person to buy into this alternate accommodation for only 60 per cent of what it would cost to buy the property freehold.
They would be granted a five-year lease and that would be rolled over on five-year options or seven-year options, meaning that for 40 years, an elderly couple could buy into one of these schemes for 60 per cent of the value of the house.
Sterling First collapsed last month however investors had raised concerns with the Australian Securities and Investments Commission (ASIC) last year.
When questioned by the Weekend Courier last year on behalf of those residents a spokesperson for ASIC would not comment or confirm if the company was being investigated despite concerns also being raised with ASIC by the State Government.
Baldivis MP Reece Whitby said ASIC had failed local investors miserably and he wanted the federal corporate regulator to become a much tougher watchdog.
“ASIC clearly failed in its role to protect investors and retirees now have millions of dollars at risk,” he said.
“It’s scandalous that seven Baldivis investors may have lost up to $200,000 each.
“A loss like that in retirement is something you never recover from.
“The WA Government raised this issue last year with ASIC as the federal agency responsible for policing investment schemes.
“However, this did not stop more seniors investing their money.”
Mr Whitby said elderly investors who were hoping to secure a roof over their head in retirement now stand to lose most of their money.
He said it was a shattering blow for hard working people who simply wanted to take responsibility for looking after themselves in retirement.
“I have been working with Commerce Minister John Quigley on behalf of local investors since I became aware of this issue,” he added.
“A number of Baldivis investors came to see me and they just want security in their retirement. Some even sought legal advice about their investment before going ahead. They deserve better than this.
“I support the Minister who told State Parliament that ASIC should investigate possible prosecutions to be laid against the promoters of the scheme.
“I believe ASIC should become a much tougher watchdog with big sharp teeth.”
Baldivis residents Rod and Tracey King contacted the owners of the company who subsequently ignored their requests for information.
“We contacted them in October last year and it wasn’t until months later we received an email from one of the company owners, Ryan Jones, who apologised for the delay and explained it was due to his wife having a hysterectomy,” Mr King said.
“We even rang them and they told us everything was fine – even when they were in administration.”
With no returns as promised from their investment, the Kings can no longer pay the rent on their property and have been forced to move into a caravan.
They also are fearful they won’t see a cent of their original $200,000 investment.