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APRA action against Seventh Floor Superannuation Fund trustee

30 Aug 2007
07.40

The Australian Prudential Regulation Authority (APRA) has taken action against three brothers who had illegally operated a small superannuation fund for themselves. The three brothers had been directors of Gavex Pty Ltd which acted as the trustee of their Seventh Floor Superannuation Fund (the Fund).

APRA has disqualified John Tony McCafferty from being or acting as a trustee, investment manager or custodian of any superannuation entity, or as a responsible officer of a body corporate that is a trustee, investment manager or custodian of a superannuation entity.

APRA has also accepted an Enforceable Undertaking from Rodney James McCafferty and Kenneth Aubrey McCafferty after they acknowledged they did not fulfil their trustee obligations. They have agreed to wind up the Fund or appoint a licensed trustee to it by 31 October 2007, and not to act as trustee of any superannuation entity for a period of ten years from 1 November 2007.

APRA disqualified John Tony McCafferty for making unauthorised transfers of $187,541.87 out of the Fund in contravention ofthe conditions of release of benefits under the payment standards set out in Part 6 of the Superannuation Industry (Supervision) Act 1993 (SIS) Regulations. His two brothers had not been aware of the transfers.

Rodney and Kenneth McCafferty have acknowledged in their Enforceable Undertaking that as trustee directors of the Fund, they had a duty to comply with the payment standards and to ensure that the sole purpose of the Fund was to provide for retirement income in accordance with the governing legislation.

APRA took these actions after receiving information in December 2006 from solicitors acting on behalf of Rodney and Kenneth McCafferty.

The Fund had been a self‑managed superannuation fund (SMSF) with the members being the three brothers. However, the Fund ceased to be a SMSF and became subject to APRA’s supervision when John Tony McCafferty resigned from his position as a corporate trustee director in 2004.

The disqualification of Tony McCafferty is listed on APRA’s disqualification register.  Click here for more details.

A copy of the Enforceable Undertaking accepted by APRA is available on APRA’s website.  Click here for more details.

The Australian Prudential Regulation Authority (APRA) is the prudential regulator of the financial services industry. It oversees banks, credit unions, building societies, general insurance and reinsurance companies, life insurance, friendly societies, and most members of the superannuation industry. APRA is funded largely by the industries that it supervises. It was established on 1 July 1998. APRA currently supervises institutions holding approximately $2.5 trillion in assets for 20 million Australian depositors, policyholders and superannuation fund members.