More than 120,000 Australian investors have been locked out of their accounts after the Australian Securities and Investments Commission (ASIC) issued a shock order freezing $11.5 billion in funds managed by La Trobe Financial.
The corporate watchdog placed interim stop orders on three of La Trobe’s seven investment products, citing concerns over high-risk lending practices that were allegedly misrepresented as low-risk options. The affected funds include La Trobe’s 12-month and two-year investment accounts, as well as the USPC Fund Class B.
ASIC alleges that La Trobe marketed these products—often aimed at retirees seeking stable returns—as safe investments, despite their exposure to private credit loans, including those to property developers. The regulator highlighted two key issues: the products’ risk profile may not align with their advertised safety, and the investment timeframes were not clearly defined for retail investors.
In response to ASIC’s action, La Trobe Financial froze all investor accounts and temporarily shut down its online investment platform, La Trobe Direct, preventing new investments and access to existing funds.
Despite the freeze, La Trobe’s Chief Investment Officer Chris Paton sought to reassure investors. “Your investments remain safe and under our careful stewardship,” Paton said in a video message. He emphasized that the funds are backed by diversified, high-quality loan assets and that income payments would continue as normal.
Also read: ASIC Charts Strategic Path for Australia’s Capital Markets Reform
Paton also confirmed La Trobe’s commitment to working closely with ASIC to resolve the concerns and restore investor access. “We take our role as responsible stewards of your capital very seriously,” he said.
ASIC’s stop orders are valid for 21 days unless revoked earlier. The regulator stated its actions were aimed at protecting consumers from financial products that may not suit their needs or objectives.
As the situation unfolds, investors are left waiting for clarity on when they’ll regain access to their funds.
