Sequoia Financial Group Ltd (ASX:SEQ) has announced the immediate resignation of chief executive Garry Crole as subsidiary InterPrac Financial Planning faces Federal Court action linked to the collapse of two investment funds that cost 12,000 investors $1 billion.
Head of corporate finance Alex Fabbri has been appointed interim chief executive, while non-executive director David Hentschke will serve as interim chairman. Sequoia has begun searching for a permanent replacement.
Leadership change follows regulatory action
Crole’s departure comes after his contract expired in June and was not renewed.
The Australian Securities and Investments Commission (ASIC) launched proceedings against InterPrac in November, alleging it failed to ensure former authorised representatives complied with best-interest obligations and maintained inadequate risk-management systems.
InterPrac was the licensee for advisers who directed client funds into the Shield Master Fund and First Guardian Master Fund, both now in liquidation.
Market reacts positively
Sequoia shares rose 13% following the leadership announcement.
Crole said it had been a privilege to lead the business and thanked advisers, clients and employees. He will remain a substantial shareholder.