Peter Drake won his case in the Federal Court against the Australian Securities and Investment Commission. The Federal Court judged that the witness standing against the LM Investment founder was evasive and preposterous.
The ASIC had taken legal action against Drake and LM Investment directors Eghard van der Hoven and Francine Mulder on the grounds of breaching the duties of the directors while managing the financier for Gold Coast.
The company’s management was subjected to voluntary administration on March, 2013, wiping off nearly all of the $800 million investment in three of its major funds made by offshore clients and around 12000 Australians.
The Sydney Morning Heral reports:
“Its best known development was the $1.5 billion Maddison Estate in the Gold Coast hinterland, which was spruiked by swimming star Susie O’Neill and stripper turned celebrity gardener Jamie Durie.
“ASIC’s case against Mr Drake and his two co-directors centred on the board giving approval to grant Mr Drake personal loans of $26 million ahead of the group’s collapse. ASIC had initially taken action against three other board members but dropped its case against those directors last year.”
Justice James Edelman who was responsible for dismissing the case against LM Investment said that he found no substantial ground in the evidence furnished by ASIC’s principal witness and expert Hugh Wolley.
Wolley was presented in court by the ASIC as an experienced and credible investment manager with around 31 years of experience.
Justice Edelman said, “My concerns with Mr Woolley’s evidence were so serious that I do not accept his evidence on any contested matter, even if it was not the subject of any substantial cross-examination”. The Justice will be joining the High Court after his next two judgements.
He added, “Mr Woolley’s evidence did not merely cause a substantial impairment of ASIC’s case in relation to the 2011 variation. It created substantial gaps in the whole of ASIC’s case…Unfortunately, he had paid scant attention to the key documents. And when confronted by matters which were inconsistent with ASIC’s case, many of his answers were preposterous,” reported The Sydney Morning Herald.
Justice Edelman further went on to comment that Wolley couldn’t be considered an independent expert and was neither reliable nor credible stating “issues of demeanour and the general conduct of Mr Woolley’s evidence including his evasiveness and inability or unwillingness to answer simple questions,” The Sydney Morning Herald quoted the Justice.
The regulatory body is looking to get the judgement reviewed.
This follows on the allegations raised to PM Malcom Turnbull stating that ASIC has conspired to deliberately cause hundreds of millions in losses to investors in order to frame investment promoters. Since ASIC have been so desperate to win cases, they have been causing unnecessary investor losses because without proving losses they can’t win in court.
Numerous senators have called for a Royal Commission into the abuse of power by the corporate regulator.
Recently, they have also been accused of doing political favours to interfere in the political process to destroy a political party founder’s companies as a favour for allegedly corrupt Senator Sam Dastyari.