Notification of Misconduct by Active Super

This notice is published in connection with proceedings brought in the Federal Court of Australia against LGSS Pty Ltd ACN 078 003 497 (LGSS) as Trustee for Local Government Super (otherwise known as the Active Super fund) by the Australian Securities and Investments Commission (ASIC).

On 5 June 2024, the Federal Court found that LGSS contravened Australia's financial services laws by making false and misleading representations to members and potential members of the Active Super fund about its “green” or “ESG” credentials. The representations were made in:

  • the Active Super fund’s website (the Website);
  • an email sent to 45,621 members of Active Super, that was also published on the Website;
  • the Impact Report for 2021/22;
  • PDS Fact Sheets issued in 2021;
  • PDS Fact Sheets issued in 2022;
  • the Responsible Investment Report for 2021/22;
  • the Sustainable and Responsibility Investment Policy which was available in three separate versions during the period 10 August 2022 to May 2023; and
  • an interview with the CEO of Active Super in Investment Magazine.

In these statements, LGSS represented that it would not make or hold investments in companies that derive:

  • more than 10% of their revenue from gambling;
  • one-third or more of their revenue from coal mining; or
  • any revenue from oil tar sands projects; and

following Russia's invasion of Ukraine, that LGSS would divest its Russian investments and make or hold no further investments in Russia.

These representations were false or misleading and / or liable to mislead the public in circumstances where, at the time of making them, the Active Super fund held investments in or exposure through investments in pooled trusts to companies such as:

  • SkyCity Entertainment Group Ltd and Pointsbet Holdings Ltd (Gambling)
  • Gazprom PJSC and Sberbank of Russia (Russian entities)
  • ConocoPhillips and Shell Plc (Oil tar sands)
  • Whitehaven Coal Limited and Coronado Global Resources (Coal mining)

A full list of the relevant investments is set out in Annexure B to the orders made by the Federal Court on 20 June 2024. A link to those orders is below.

The Court will determine the penalty for this misconduct following a hearing listed for 17 December 2024.  

Further Information

LGSS’s misconduct contravened the following financial services laws:

  • section 12DB(1)(a) of the Australian Securities and Investments Commission Act 2001 (Cth); and
  • section 12DF(1) of the Australian Securities and Investments Commission Act 2001 (Cth).

For further information about LGSS’s misconduct, see the following links:

  • the Court’s judgments against LGSS on liability (available here and here); and
  • ASIC’s media release (available here).