Emerging Perspective

LM Investor Victm Centre (LMIVC) Volunteers maintain the utmost respect for the Honorable Prime Minister of Australia and members of the governing party. LMIVC Volunteers accept there may be many reasons that prevent the Australian Government acknowledging the LMIVC appeal and, similarly, prevent the release of a statement of assurance to the LM investor population in general. In the light of such constraints LMIVC volunteers choose to look again at public domain reports of LM events and activities.

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LMIM held the trustee position over a range of funds that included the FMIF and the MPF. To begin understanding the responsibilities of a trustee as defined in law, this extract from Wikipedia is helpful ..

' .. the minimum content of obligation that all trustees owe. This is always to act in good faith and in the best interests of the beneficiaries. If trustees breach their duties, the beneficiaries may make a claim for all property wrongfully paid away to be restored, and may trace and follow what was trust property and claim restitution from any third party who ought to have known of the breach of trust.'

It is English Trust Law. Australian may differ. One can read it at the end of the third paragraph on this page http://en.wikipedia.org/wiki/English_trust_law . Corporate Law and the Fund Constitution itself operate in this arena also so one must be cautious. However it is difficult to imagine either would dilute or negate such fundamental trustee requirements.

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Korda Mentha are the current Australian Court appointed LM MPF trustee. Within their assessment of fund status and activities to establish return to investors Korda Mentha have an item referred to as the Peregian Beach Breach of Trust. Affidavit documents are in the public domain. On page four of the affidavit document at http://www.kordamentha.com/docs/au_109_lm/peregian-beach---2-sv-affidavit-exhibits.pdf?sfvrsn=2 is an explanation of the duties required of LMIM as the trustee for the MPF.

Paragraph 17 on page 4 of this document reads:

Quote..

'At all material times LMIM as the trustee for the MPF owed a fiduciary duty to the members of the MPF

a. not to place itself in a position of conflict of interest or duty ("the no conflict duty" ); and

b. not to obtain an unauthorised benefit from it's role as trustee of the MPF ("the no profit duty").'

..Unquote

A strong indication that trust law is applied similarly in Australia.

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The Sydney Morning Herald, on the 27th October 2012, ran an article around the activities of LM. Here is part of that article:

Quote..

'The owner of the Maddison property is Coomera Ridge Pty Ltd and this company has one director, Peter Charles Drake.

The second mortgagee, which presumably has been provided with the money from investors, is a company called LM Coomera Pty Ltd (renamed Maddison Estate Pty Ltd) which has one director also, Peter Charles Drake, and one shareholder, LM Coomera Holdings Pty Ltd.

This company also has one director: you guessed it, and one shareholder, LMIM Asset Management Pty Ltd.

LMIM Asset Management Pty Ltd has only one director and one shareholder, too. Yes, that's right.'

..Unquote

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Emerging from these important reports is a strong suggestion that multiple conflict of interests have been created by the CEO / MD of LMIM, the one person that should have been leading the charge of fiduciary duty to prevent conflict of interest at LMIM, the trustee of the MPF (and other funds).

The possible implications are immense and extensive. Who else knew? Who should have known? Other LMIM Board of Director members? The authority providing the licenses for these companies? Other parties?

Using the search facility at https://connectonline.asic.gov.au/RegistrySearch/faces/landing/bn/SearchBnRegisters.jspx?_adf.ctrl-state=jspp8vqku_4 one is able to see that the ASIC registration date for Coomera Ridge Pty Ltd was the 21st March 2006. The possible implication of that fact alone is stunning. Was there an element of premeditation extending back to well before the FMIF collapse in 2009?

Questions that Volunteers at the LMIVC believe the LM Investor population will now have at the forefront of their concern. Questions that the LMIVC hope, with the help of the observations above, will, if not already, be taken up by the Australian authorities currently investigating this absolute debacle that has ruined the lives of so many.

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