Mark Thomas, one-time head of the now-defunct van Eyk Research, is facing the prospect of a lengthy jail sentence and/or substantial fines on criminal charges heard in a Sydney courtroom last week.
Thomas is charged with four counts of dishonesty in using his corporate positions to funnel a loan via van Eyk-owned vehicles to fund his purchase of shares in the storied Australian fund research house.
The complex series of transactions in early 2014 through a number of associated entities were ultimately designed to facilitate a A$5 million loan to Thomas aimed at preventing “a third party from obtaining a majority shareholding in van Eyk Research”, the Australian Securities and Investments Commission (ASIC) alleges.
ASIC says the maximum penalty on all four counts, laid in the Downing Centre Local Court last Tuesday, “is $340,000 or imprisonment for five years, or both”.
The charges relate to Thomas’ role as director or officer in a number of companies including Blueprint Investment Management (BIML), Three Pillars Portfolio Managers and van Eyk (both the Australian and NZ versions).
In 2013 van Eyk broke into the NZ market with its purchase of the-then Pyne Gould Corporation (PGC) owned Perpetual Portfolio Management and Perpetual Asset Management. At the same time, the George Kerr-headed PGC sold down its almost 40 per cent stake in van Eyk to Australian Wealth Investments, the ASX-listed company once headed by Andrew Barnes, who subsequently founded NZ trustee roll-up Perpetual Guardian (beginning with buyout of Perpetual Trust from PGC).
However, in August 2014 the responsible entity (Macquarie) of the van Eyk multi-manager BIML froze certain funds in the suite, citing a non-compliant exposure to illiquid assets. The Macquarie move triggered a chain reaction that quickly pushed van Eyk into liquidation as well as a spurring a number of long-running legal actions involving Kerr, Thomas, Barnes and others.
Both ASIC and the Financial Markets Authority (FMA) also embarked on lengthy investigations into the saga with the NZ regulator taking no action after closing the book on van Eyk in 2016. Macquarie was fined A$400,000 by the NSW Supreme Court in 2016 for its part in the downfall by failing to properly monitor the BlML funds.
While various settlements have since changed hands, the legal action against Thomas marks the first serious criminal charges to emerge out of the messy van Eyk implosion.
Thomas was an early employee of the once-dominant Australian fund research house launched by Stephen van Eyk in 1990, helping to grow the brand significantly in Australia (and briefly in NZ), eventually ousting the founder in a bitter coup in 2010.
The Australian Commonwealth Director of Public Prosecutions is running the case against Thomas following an ASIC referral with the matter due back in court on July 13.