Tipping the authorities off about Astarra required – as I said – no special genius on my part. I was tipped by a blog reader who noticed that the Astarra investment committee claimed Charles Provini as a member whilst Provini was the CEO of Paradigm Asset Management. I have written extensively on Paradigm Asset Management (see here for a decent summary).
Dominic (and presumably his team) had many of the issues with Astarra nailed by the time he tipped me off. I worked out a few more.
I reported the story to the Sydney Morning Herald who did not think they had enough evidence to run the story. [They printed nothing until much later.]
Later I worked a few more things out and using connections ensured that the whole story landed directly on the desk of Tony D’Aloisio (the head of our securities regulator).
Dominic found about half a dozen red flags with Astarra. He has since listed them in this article without revealing that he was my original tipper. Dominic’s article shows clearly that there were plenty of reasons not to invest in Astarra – and these reasons are valid reasons to be wary even if you have no strong basis to allege fraud.
The problems are wider than either Dominic or I anticipated. For instance we knew nothing of ARP Growth – and that may be the most seriously impaired fund of the lot. It is also the only fund on which I am willing to determine – absolutely – involved fraud. (I have two wildly different sets of accounts for ARP Growth - at least one of those accounts must be fraudulent.)
The rest of the issues with Astarra I will leave in the capable hands of our regulator and perhaps the class action lawyers. I want to get back to making money for our clients.