Concerns about collapsed authorised representative network Sphere Insurance Group were first raised with the corporate regulator seven years ago, insuranceNEWS.com.au can reveal.

Queensland-based Sphere entered liquidation in June, owing more than $11 million. On appointment, liquidator Tracy Lee Knight found a client money trust account showed a balance of $44.15.

As previously reported, Ms Knight has started court action over alleged breaches of director duties and other matters arising from trust and general account transactions.

It has now emerged that a whistleblower flagged concerns about the company with the Australian Securities and Investments Commission in 2019, but the regulator declined to pursue it further.
insuranceNEWS.com.au understands this decision was challenged in 2021, but ASIC again took no further action.

A source with knowledge of the complaint, who asked to remain anonymous, says damage from Sphere’s collapse could have been limited had ASIC acted earlier.

“Concerns were raised with ASIC in 2019 and again in 2021, but ASIC declined to investigate,” the source told insuranceNEWS.com.au.

“Regulators are meant to act before the damage is done, not explain their inaction afterwards. ASIC should now answer a simple question: why were repeated warning signs not enough?”

ASIC declined to address the criticism, or explain its stance in 2019 or 2021.

“The matter is under investigation, and we are unable to comment further,” a spokesperson said.

Sphere director Peter Marten has declined to comment when contacted by insuranceNEWS.com.au.

The liquidator’s report says Sphere’s director attributes the company’s failure to alleged misappropriation of funds by a former authorised representative and inadequate books and records.