Protect your retirement savings-Australian Crime Commission Board warns

Got a hard-earned nest egg you’re husbanding towards retirement? Don’t get complacent - 2,400 Aussies have already been fleeced. Make sure those assets are protected.

AUSTRALIAN CRIME COMMISSION BOARD MEDIA RELEASE 28^th  September 2011

The Australian Crime Commission (ACC) Board today urged Australians to protect themselves against the growing threat of serious and organised fraudulent investment scams.

Chair of the ACC Board, Australian Federal Police Commissioner Tony Negus, said serious and organised criminals are using the Internet to provide false legitimacy in their attempts to target the retirement savings of Australians.

“The level of superannuation and retirement savings in Australia is attractive to organised crime groups. Those people looking particularly to invest their savings should be wary of these fraudulent scams,” Commissioner Negus said.

“These scams are typically in the form of unsolicited cold calls used in association with sophisticated hoax websites to try and legitimise the scam. This type of crime is targeting the life savings of hard working people. Australian and international law enforcement partners stand committed to protecting the community from these crimes.”

To tackle this growing threat, the ACC Board established a multi-agency task force that aims to disrupt fraudulent serious and organised investment scams and harden the Australian environment against this type of organised criminality.

Led by the ACC, the task force comprises of law enforcement, regulatory and service delivery agencies across federal, state and territory government. Task force members include all ACC Board agencies, as well as the Australian Competition and Consumer Commission, Department of Broadband, Communications and the Digital Economy, Department of Immigration and

Citizenship, Department of Human Services and the Australian Transaction Reports and Analysis Centre.

Australian Securities and Investments Commission Acting Chairman, Belinda Gibson, said these fraudulent investment scams are incredibly sophisticated and very difficult for even experienced investors to identify.

“Perpetrators of these fraudulent scams are skilled at using high-pressure sales tactics, both over the phone and via email, to persuade their victims to part with their money,” Ms Gibson said.

Based on initial indications, more than 2400 Australians have lost in excess of $93 million to these scams, but it is believed there is a high level of underreporting and the extent is far greater.

“I urge investors to be immediately wary if they are called at random by someone offering an investment opportunity overseas,” Ms Gibson said.

This Media Release is issued by the ACC Board as a Public Bulletin in accordance with Section 60 of the Australian Crime Commission Act 2002.

People can protect themselves by hanging up on any suspicious calls received and by further investigating and researching any investment offer:

• Visit www.moneysmart.gov.au or call 1300 300 630 for further information.

• Alert your family and friends to this fraud, especially anyone who may have savings to invest.

• Report suspected fraud to the Australian Securities and Investments Commission, via www.moneysmart.gov.au or 1300 300 630, or your local police. Any information that can be provided such as company name, location and contact details will assist with subsequent investigations and enquiries.

• Hang up on unsolicited telephone calls offering overseas investments.

• Check any company you are discussing investments with has a valid Australian Financial Services Licence at www.moneysmart.gov.au

• Always seek independent financial advice before making an investment.

For more information, see the Serious and organised fraudulent investment scam fact sheet on the Australian Crime Commission website,

http://www.crimecommission.gov.au/publications/crime-profile-series/serious-and-organisedfraudulent-investment-scams.htm.

This Media Release is issued by the ACC Board as a Public Bulletin in accordance with Section

60 of the Australian Crime Commission Act 2002.

Small investors' rights are better protected in countries such as Botswana, Romania, Ghana and Georgia than they are in Australia.

A World Bank study has ranked Australian laws and regulations on investor protection at 57th in the world. So low is Australia's ranking, it lags behind Botswana, Romania, Ghana and Georgia.

The top three nations are New Zealand, Singapore and Hong Kong.

The Sydney Morning Herald points out the Australian legal system is weak at holding directors liable for related-party transactions.

The report gave high marks to Australia's disclosure regime and shareholders' ability to sue a company, but it found laws on director liability were unusually weak. Overall, the Doing Business 2010 report ranked Australia the ninth-best place to conduct business of 183 economies, based on an assessment of 11 aspects of running a business here.

The report comes after several collapses have thrown the spotlight on related-party transactions. The failed finance company Octaviar (formerly MFS Limited) faces a potential litigation claim from IMF Australia, which has alleged MFS failed to disclose related-party transactions associated with its Premium Income Fund.

Administrators of the collapsed Allco Finance Group have also queried several related-party dealings, including a $50 million loan made to an investment vehicle owned by Allco directors and senior management.