"Investment Fund Faced AU$10.5m Penalty for Allocating Funds towards Prohibited Sectors, Including Gambling"
Rewritten Article:
Active Super, an Aussie ethical super fund, has copped a AU$10.5m (US$6.6m) fine for funding sectors considered a no-go, like gambling, despite its self-proclaimed ethical stance. You know, the one it brags about on its website, impact reports, and product disclosure statements. Mind you, it even lists gambling companies in its excluded list of potentially hazardous industries.
The gambling-related investments included sports betting operators like Tabcorp and PointsBet, as well as casino giant SkyCity Entertainment. Ouch, right? The failure to live up to its principles didn't stop there, either; they also held questionable investments in oil companies, coal firms, and entities with Russian ties. That's quite a mix, wouldn't you say?
The Australian Securities and Investments Commission (ASIC) happened upon Active Super's shady dealings, leading to the hefty fine. Now, here's a bit of insider info: it's not the first time ASIC has cracked down on funds deceiving customers with fake ethics. Remember that super trustee hit with a penalty of ten million smackers back in 2025 for claiming to dodge investments like tobacco and gambling, while unknowingly maintaining ties with those very sectors? Yep, that's the one.
ASIC Deputy Chair, Sarah Court, commented on the penalty, stating it serves as a clear warning to other investment funds to toe the line and fulfill their promises. Don't wanna end up with a penalty like Active Super? Better get your ethical house in order, mate!
Understanding the regulatory environment for Australian ethical investment funds:- Australian Financial Services License (AFSL) is mandatory for funds offering investment products, ensuring compliance with the Corporations Act 2001.- Mandatory product disclosure statements (PDS) must clearly outline investment strategies, ethical criteria, and risks.- ASIC’s 2023–2027 strategy emphasizes combating greenwashing, promoting transparency in ESG claims.
ASIC has the power to penalize misleading claims about ethical credentials, as demonstrated in several past instances, like the March 2025 case where a super fund was hit with a AU$10.5 million penalty for falsely claiming to avoid certain investments. The enforcement body uses surveillance, public guidance, and litigation to ensure compliance.
Industry benchmarks, such as RIAA’s responsible investment standards, also play a role in ethical investment funds' compliance, with fund heavyweights like Australian Ethical and HESTA adhering to the guidelines. Transparency on ESG integration and annual audits are required.
With 88% of Australians expecting ethical investments, funds must adopt stricter self-regulation to keep members happy. A proposed future policy direction may introduce guidelines for super funds' overseas investments, including risk assessments and government-backed safeguards for ethical mandates.
[Source: Responsible Investment Association Australasia (RIAA) report (2024), riaa.org; RIAA’s listed "responsible" super funds, riaa.org; Federal Court penalty for greenwashing (2025), klgates.com; Foreign policy recommendations for super funds, internationalaffairs.org.au; Consumer demand for ethical verification, responsibleinvestment.org]
- Despite Active Super's claims of ethical investment, the Australian Securities and Investments Commission (ASIC) fined them AU$10.5 million for funding gambling-related sectors like sports betting operators Tabcorp and PointsBet.
- The financial sector faces increasing scrutiny, as ASIC's 2023–2027 strategy focuses on combating greenwashing and promoting transparency in Environmental, Social, and Governance (ESG) claims.
- In general-news and crime-and-justice, misleading claims about ethical credentials can lead to hefty penalties, as demonstrated in past cases like the March 2025 super fund case.
- Adherence to industry benchmarks, such as RIAA’s responsible investment standards, is crucial for ethical investment funds' compliance, with fund heavyweights like Australian Ethical and HESTA following the guidelines.
- In the future, super funds may face stricter guidelines for overseas investments, including risk assessments and government-backed safeguards for ethical mandates, due to growing consumer demand for ethical verification.
