Monday, June 6, 2011

Reminding Peter Johnston what he once thought about Astarra

Some people are just too precious.

Longtime followers of this blog will remember that I was instrumental in the exposure the biggest funds management theft in Australian history - Trio/Astarra.

Most of the victims of Astarra were clients of financial planners where the planner was a member of the Association of Independently Owned Financial Planners (the AIOFP). Astarra and its principals were regular attendees at AIOFP conferences and AIOFP members received kick-backs from Astarra - some disclosed, some not disclosed.

Peter Johnston is the executive director of the AIOFP and a regular apologist for AIOFP members. He is quoted today in Investor Daily - an Australian industry newsletter:
Association of Independently Owned Financial Planners (AIOFP) executive director Peter Johnston said it was a comfort that Trio and Astarra Asset Management were deemed "a blatant fraud". 
"The advisers are tired of being blamed for product failure, these products should not have been in the market in the first place and the ultimate responsibility lays with the successive politicians over the years who have failed to understand the industry," Johnston said.

Well Peter, I differ. Financial Planners market themselves as having expertise and are required under law to understand the products they sell. Moreover Peter clearly thinks he has this expertise. I have an email he sent to two financial planners who put their clients into Astarra. It says:
Peter/Steve, met with Shawn [the guy who ran Astarra] today. I am still of the opinion that he is innocent of any fraudulent behaviour with Astarra, I will back my 30 years of being in business and dealing with all sorts of characters with my assessment. He no doubt can be accused of sloppy paperwork but that is a far cry from the hell he has been through.
It is funny how Peter conveniently forgets that he vouched for Shawn Richard. He did so repeatedly (although not publicly since Shawn admitted guilt).

Peter Johnston agreed to a $100 thousand bet with me on the innocence/guilt of Shawn Richard and whether the money would be found where Peter thought it was. He later backed out which is a pity because I would otherwise be $100k richer. (You can read the story here.)

Peter accused me in the press of being motivated by "professional jealousy" re Astarra. I told him that was defamatory: I am a hedge fund manager - I am motivated by money.

Finally Peter thought that I would get sued over Astarra. To quote an email to me:
I suggest you read below and start amending your views or check your sources as you ‘can never believe what you read in the paper.’ I checked with the asset consultant then Shawn himself, this is now been confirmed by the Administrator, ALL of the non hedge fund monies are exactly where they were supposed to be. You will also now find that the ASF cash and 3 of the 5 Hedge Funds are now accounted for. We are awaiting the final 2 which is going to put the spot light and legal proceedings in a different direction, you can be assured of that.

Peter Johnston
Executive Director
Bluntly, Peter Johnston threatened to sue me. He defamed me in the press.

And now he revises history to absolve himself and his members.

But that is not my problem with Peter Johnston. Peter Johnston is a coward who does not have the courage of his convictions. He bet 100 thousand dollars on the Astarra outcome. And then - when he realized that I was serious - he backed down.




# 56 said...

Smart coward, if he was not his wallet would be significantly lighter.

Anonymous said...

too bad that this post doesn't appear on top of google when I searched for Peter Johnston. It would have been awesome.

Anonymous said...

Love your blog John. You're way too smart to waste time with self-serving idiots like this guy. If you can't make money shorting it, why waste time with it?

John Hempton said...

I guess I should not waste time with people who threaten to sue me...

Fair comment. I was annoyed.


Anonymous said...

John are you taking it too easy on that revisionist coward? At best he is a total fool at worst complicit through a lack of diligence fostered by commissions and other sponsorship. Actually at worst he may have known all along the dubious nature of the affair.

No doubt you recall this article where Peter claimed all the money was or would be shortly found
This line was interesting "[Mr Richard's] involvement now will be purely a financial one supporting the AIOFP via his hedge fund.

How about a post detailing as much as you know about the commissions and other financial support Peter and the AIOFP received.

John Hempton said...

I know I am kind. Generally I am a kind understated kind of guy!

Anonymous said...

its a shame that industry press don't remember his previous statements...maybe Investor Daily should publish a "best of Peter Johnson's public statements" cover story

Anonymous said...

Don't let it go John, so far Peter and his merry crew seemed to have escaped the wrath of the regulators and professional bodies for their conduct in this mess.

XYZ said...


I would like you opinion on the Trio levy.

I want to understand why we as investors are paying a subsidy to clean up the mess? We are paying for APRA (maybe others) failure to do their job.


Anonymous said...

Shakespeare would be proud of Peter Johnston's public statements..."it is a tale Told by an idiot, full of sound and fury, Signifying nothing"

John Hempton said...

About the levy: it is stupid - and it is a conceivably unlimited obligation on the investors in normal funds.

BUT it is all the government could do in this instance - and I am not critical.

HOWEVER I think there are several things that should be done to prevent Astarra/Trio happening again (see my submission to the Cooper review).

AND UNFORTUNATELY I think the government has adopted none of the necessary measures.


Irene Burgess said...

Oh , What lovely reading John. You did make me laugh and I liked it. As an Investor in Astarra, I speak for many of us when I say "Thank You", "Thank You for being a Whistle Blower". We love You and I love reading your Blog (even If I do find some hard to understand). I enjoy trying to learn and believe I am never too old.....

Thanks again.
Irene Burgess

Anonymous said...

Hi John love your blog. Great post. H.

John Chew said...

Peter Johnston has blackened the residual goodwill of any financial planner across the country. Any financial planner worth his or her salt should push to oust Peter or withdraw from the association. Many in my circle will never go back to a financial planner despite the risks because they've seen that the risks never really went away with a financial planner - they just became hidden.

Zorro said...

I want to know about the crowd of people that surrounded Astarra/Trio and their complicity and criminal behaviour. I cannot believe Shawn did this by himself. If secret commissions were paid then what was Peter Woods role(Astarra Head of Distribution ) . Not to mention Wrights Global and Flader, here we have a major organized criminal conpsiracy to defraud innocent Australians of their retirement funds and ASIC has one scalp . He is still claiming to his friends he knew nothing and is talking to other friends about heading overseas. They should have a dozen people on charges and peter johnston should have his financial affairs examined because his illogical support screams of somekind of involvement. if anything needs a Royal Commission its this episode , people need to be properly examined under oath in front of a judge with the powers to compel people to answer questions.

Also, how the hell is Cash getting bail at the moment, he is pulling classic diversionary stunts like claiming neurological disorders and sacking his own lawyers to put off sentencing. He should be on remand not bail.

Zorro said...

BTW the Shawny Cash nickname wasnt given to him because he splashed cash around it came form his claim that he was Johnny Cash's nephew

SarahWill said...

always a good read John

Crocodile Chuck said...

Where is Jack Flader?

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