Funds management boss to surrender passport

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The Supreme Court of Queensland has ordered LM Investment Management founder Peter Drake to surrender his passport, restraining his travel out of Australia.

LM Investment Management – the company responsible for managing at least $750 million on behalf of almost 12,000 investors in Australia and overseas – went into administration in March 2013 . In April, ASIC suspended the company’s AFSL for two years.

Following an application from ASIC, the Court made interim orders to prevent Drake from selling his assets, as the regulator’s investigation into the collapsed Gold Coast-based fund manager continues. The orders do not extend to the sale of Drake’s Mermaid Beach, Queensland home, said ASIC.

According to News Ltd, the property was sold yesterday for $7.35 million – “less than half the asking price”. The surplus of the sale proceeds from the sale of Drake’s home will go to his solicitors' trust account and cannot be used or dealt with unless by order of the court or agreement with ASIC.

William Fletcher and Tracy Knight of Bentleys, who have been appointed as joint and several receivers of Drake’s property, will identify and secure all assets held by or on behalf of Drake.

The matter will return to the Supreme Court of Queensland on 9 October, 2013, when the court will decide whether to maintain the interim orders that have been made.

ASIC’s investigation into the collapse of LM Investment Management is looking at the conduct of the directors and the management of the various managed investment schemes and transactions with related companies.

LM is the responsible entity of the following registered managed investment schemes:

  • LM Cash Performance Fund
  • LM First Mortgage Income Fund
  • LM Currency Protected Australian Income Fund
  • LM Institutional Currency Protected Australian Income Fund
  • LM Australian Income
  • LM Australian Structured Products Fund
  • The Australian Retirement Living Fund

LM also operates the unregistered LM Managed Performance Fund.

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