Peters & Peters

ASIC sues Active Super for misleading adverts

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Key facts:

In August 2023, ASIC commenced civil penalty proceedings in the Federal Court against LGSS Pty Limited (LGSS), alleging misleading conduct and misrepresentations to the market relating to claims it was an ethical and responsible superannuation fund.

LGSS is the trustee of Active Super – a superannuation fund with AU$13.5 billion in assets. ASIC alleges that it has misrepresented Active Super’s investment portfolio to the market and investors. During the relevant period, LGSS had responsibility for the content displayed on the Active Super website as well as its social media postings and publications.

A liability hearing was listed in March 2024, with judgment handed down in June 2024. The judge held that ASIC was entitled to the declarations as to the contraventions of the Act which it sought, save in respect of the tobacco representations and those in respect of Russia.

A hearing is due to be listed to consider the appropriate form of declaratory relief.

LGSS represented Active Super as an ethical superannuation fund, which provides responsible and sustainable investments for its members, and which incorporates consideration of ‘environmental, social and governance’ risks into its investment decisions. To achieve this, LGSS stated that Active Super placed certain companies on an investment restriction list for Australian equities and an investment restriction list for international equities.

More specifically, Active Super was said to have restricted investments and securities which compromised its environmental and social values (e.g. gambling companies, tobacco, weapon manufacturing, coal mining and Russian entities).

According to ASIC’s concise statement, lodged at the Federal Court of Australia with its notice of filing, ASIC is seeking declarations, adverse publicity orders and orders to pay pecuniary penalties, as well as an injunction against Active Super.

A liability hearing is provisionally listed for 25 and 26 March 2024.

Source(s):

ASIC media releases of August 2023 and June 2024, notice of filling and judgment of the Federal Court of Australia

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