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13-157MR Former Everest CEO provides two-year enforceable undertaking to ASIC
Jeremy Michael Reid, 37, of Bellevue Hill, NSW has entered into an enforceable undertaking (EU) with ASIC under which, for a period of 2 years, he will not:
provide financial services
hold an Australian financial services (AFS) licence, and
be employed by a financial services company (whether or not it holds an AFS licence or acts as an authorised representative).
The EU will not apply to Mr Reid’s involvement in his own personal investment companies.
ASIC accepted the Reid EU following an investigation into his conduct between December 2007 and June 2008 as a director and CEO of Everest Capital Ltd (Everest). Everest, which is now known as Redleaf Capital Ltd, was then the responsible entity of a number of managed investment schemes including the Everest Babcock & Brown Income Fund (EBBIF).
In offering the EU, Mr Reid acknowledged ASIC’s concerns that he:
failed to disclose to other Everest directors and officers, including members of the investment committee, that the company had received redemption enquiries from EBBIF members around the same time as parties related to Mr Reid, namely Harsit Holdings Pty Ltd (Harsit) and Reidco Pty Ltd (Reidco), had also submitted redemption requests which the investment committee was considering
was aware that had the members' redemption requests been approved, the Harsit and Reidco redemptions would have to be paid pro rata rather than in full, and
gave, on behalf of a private company of which he was sole director, a performance guarantee to an EBBIF member in return for withdrawal of their redemption request, at a time when the Reidco redemption approval was pending.
ASIC Commissioner John Price said: ‘Directors of responsible entities are gatekeepers who must ensure investment money are properly and fairly dealt with and they are essential to ensuring investors are confident and informed. When these directors fall short of the mark, ASIC will take action. Investors expect nothing less.’
Mr Reid was a director of Everest, its chief executive and a member of Everest’s investment committee.
EBBIF was established as an unlisted wholesale unit trust on 17 May 2006 and registered as a managed investment scheme on 15 November 2007. In January 2008, Harsit and Reidco redeemed $5 million and $4 million of EBBIF units respectively.
On 31 October 2008 Everest rejected all redemption requests following which the EBBIF was wound up.