Australia's penalties for fraud are an inadequate deterrent against crooked operators in the funds management industry, according to a new report that argues more should be done to protect consumers.

Due to rapid growth in the $1.8 trillion superannuation pool, Australia is one of the largest markets in the world for funds management. However, this puts the funds at greater risk of being targeted by fraudsters.



Former director Shawn Richard was sentenced to three years and nine months in jail after Trio Capital collapsed in 2009, costing investors an estimated $123 million. Credit:Jim Rice

A report published by the Australian Centre for Financial Studies (ACFS) said penalties for financial fraud in Australia were not sufficient to act as a deterrent, and harsher punishments should be investigated.

Written by Pelma Rajapaske of Griffith University, it compared the collapse of Trio Capital in 2009 with major cases of funds management fraud in the United States, United Kingdom and Canada.