Alex Tufekcic, 84, is packing a lifetime of memories into boxes as he prepares to be evicted.

Mr Tufekcic and his wife Leonie are being forced to move out in just over a week, on her birthday.

"A lovely little present for a lady that has been helping people as a nurse all her life, now she is being kicked to live on the street," Mr Tufekcic told the ABC's 7.30 program.

The stress of trying to find an affordable rental where they live in Mandurah, Western Australia, is immense.

"We [have] had two and a half years of hell, my marriage almost broke down the other day," he said.

Mr Tufekcic was told he could enjoy a comfortable retirement by signing up to a scheme called Sterling New Life. 

The Perth-based Sterling Group marketed Sterling New Life as the "smart way to retire".

Mr Tufekcic never imagined he was at risk of becoming homeless when he paid more than $200,000 to secure a long-term lease on a house.

He is one of more than 100 mainly elderly people across the country who signed up, paying more than $18.7 million in total.

But in June 2019 Sterling Group collapsed, leaving those customers facing eviction and the loss of their life savings.

Mr Tufekcic and his wife recently lost a court case brought against them by their landlord over unpaid rent since the collapse.

"Anger, what else could I be [feeling]?," Mr Tufekcic said.

Senate inquiry underway

Victims of the the Sterling Group collapse held large protests where they lobbied for a Senate inquiry, and they got one. The inquiry began two weeks ago.

One focus is ASIC's oversight of the managed investment scheme that underpinned the housing product, called the Sterling Income Trust.

Corporate regulator ASIC told the inquiry it was investigating suspected criminal misconduct related to the collapse of Sterling Group, and had referred the matter to the Commonwealth Director of Public Prosecutions to consider possible charges.

Victims claim the regulator was too slow to act on concerns about Sterling Group, and could have launched an enforcement investigation earlier to protect them.

Barrister and former ASIC investigator Niall Coburn believes the regulator should have done more.

"ASIC is under an enormous amount of strain and pressure ... [because] this is a case of regulatory catastrophe," Mr Coburn said.

When pressed by the Senate committee about whether ASIC should apologise to victims, ASIC chair Joe Longo declined, arguing the facts did not support that and the regulator had taken appropriate action when it had the evidence.

"Of course I regret that these people have lost their savings in connection with this mess," he told the inquiry. 

"I'm sort of reluctant to just blatantly apologise, because that is something that I think is inappropriate in all of these circumstances."

Despite that, ASIC conceded it should have moved more quickly, and said in future when it acts it needs to be more energetic in publicising what it has done to ensure the public finds out.

The inquiry is shedding new light on the actions of ASIC, and much of that information came from the regulator itself in a detailed submission which included a timeline of key dates, previously confidential documents, and two days of evidence.

Mr Longo told the inquiry Sterling Group placed customers — who he called "tenant-investors" — in arrangements that were "novel, complex and high risk".

Documentation given to them was more than 100 pages in length, and was so complex it would be difficult for an experienced lawyer to understand.

The millions of dollars they paid into the Sterling Income Trust was put into property-related investments that were meant to cover the rent.

Former Sterling New Life customer Alan Fardoe gave evidence to the inquiry.

He told 7.30 that when he signed up he did not understand that he was considered an investor and that his money could be at risk.

"This is our life savings we're playing with," he told 7.30. 

Red flags had been raised since 2015 

The Senate requested ASIC supply confidential internal documents to the inquiry.

One document is a 34-page internal overview marked: "Sensitive: Confidential/Privileged."

It shows that in June 2015 an ASIC staff member raised concerns about misleading or deceptive conduct in relation to financial products, based off a newspaper ad they saw.

ASIC reviewed the ad and a Sterling website, but did not take further action "because the conduct did not appear to involve a financial product".

Other misconduct complaints shortly afterwards were also dismissed. ASIC maintained at the inquiry that these complaints did not require further action. 

Red flags were also raised with ASIC in March 2017 by Western Australia's Consumer Protection office, which had sent undercover officers to a free Sterling seminar.

ASIC's internal record shows the WA regulator told ASIC it was concerned insufficient information was being supplied about Sterling New Life, and it was "ringing alarm bells".

Consumer Protection was also worried about whether the money invested in the Sterling Income Trust would cover rental payments for tenants and investors over an extended period which fell outside its jurisdiction.

Despite that, ASIC waited more than a year, until May 2018, to launch a formal investigation and start to ring Sterling's customers, including Alan Fardoe.

"In June 2018, I received a phone call from an ASIC investigative officer who was after documentation around the lease and the contracts we signed," he told 7.30. 

"He said, 'It's too early to tell because we've only just started the investigation.'"

ASIC's internal overview records that "elderly investors had little if no understanding that they were making an investment", and "they mostly had no understanding there was any risk their money could be lost and in some instances, they were told their money was placed into a trust account".

Former ASIC investigator Niall Coburn gave evidence to the inquiry.

He said receiving the concerns from the West Australian regulator was serious, as was the potential harm to the elderly investors.

Mr Coburn believes the regulator had sufficient information in March 2017 to launch an investigation to gather evidence to obtain a court injunction.

But that was strongly rejected by Joe Longo.

"To cut a long story short, the evidence that was available to us at the relevant time, or could have been reasonably available to us at the relevant time, would not have supported going off to court, certainly not with the alacrity and enthusiasm that the inquiry heard," he said. 

"That would not have been successful."

Millions more went into Sterling despite ASIC stop order

Instead, the corporate watchdog has defended what it did do.

In August 2017, ASIC issued a stop order which prevented further selling on the grounds that investors in the Sterling Income Trust were being given misleading or deceptive information, including that there were significant conflicts of interest and risks that weren't fully disclosed.

ASIC argues this was the fastest and most effective way to protect future customers.

But after the stop order, the documentation was changed and new customers were signed up.

Sterling New Life customers paid another $2.8 million into the Sterling Income Trust after August 2017.

ASIC took further action, which included a formal investigation, before the Trust began to be wound up at the end of August the next year.

After the collapse, ASIC took legal action against the company responsible for the Sterling Income Trust, Theta Asset Management.

That case resulted in the Federal Court finding that product disclosure statements given to the victims were defective and included misleading or deceptive information which contravened the Corporations Act.

Theta was fined $2 million, while its managing director Robert Marie was ordered to pay $100,000 and disqualified from managing corporations for four years.

When pressed about whether ASIC had taken too long, Mr Longo said the picture was emerging over time.

He also admitted: "I think it's fair to say that we would have liked to have moved a bit more quickly along the way."

Mr Longo said ASIC had been busy elsewhere, dealing with larger collapses.

"In terms of our process at the time, there were several other collapses that the office was looking at in Western Australia ... they, regrettably, involved much larger sums of money," he said. 

ASIC also stressed during evidence that it is not a merits regulator and does not assess whether investments are good or bad before registering them, which means they can be risky and speculative and involve people who have previously been involved in other failed ventures.

In late 2017, Sterling Group found another way to get around the pressure from ASIC by setting up a new company structure under the name Silverlink.

It then signed up 39 new customers, raising another $7.5 million.

The regulator now alleges Sterling Group "actively concealed from ASIC fundraising through Silverlink companies."

In a submission to the inquiry, ASIC claimed "Sterling's communications with ASIC omitted the Silverlink tenant-investors from a list of Sterling New Life Lessees," and "ASIC has since obtained an email dated 24 July 2018 which was sent internally to a SNLL sales representative which specifically referred to concealing Silverlink from ASIC".

'ASIC was not paying close enough attention'

Cath Dall's mother Susanne, who is on a disability pension, signed up under Silverlink.

Cath believes strong early intervention by ASIC might have prevented her mother from doing so.

"Again, to me, [that] just shows that ASIC was not paying close enough attention."

Sterling Group founder Ray Jones and his son Ryan Jones — who was a director of various companies within the group — declined to be interviewed, citing legal constraints.

Ray Jones has previously told the ABC: "I am heartbroken for the situation … Sterling New Life customers have found themselves in."

"The directors and former directors of the various companies within the group financially heavily supported these companies," he said.

"Three of the directors have now had to apply for the full old age pension.

"Furthermore one is bankrupt and another is on unemployment benefits.

The inquiry plans to hold another day of hearings on December 15 before its final report is released on February 1 next year.

In Western Australia, Alex Tufekcic has found temporary accommodation but doesn't know where he's going to live after that.

He is putting his possessions into a storage shed.

Mr Tufekcic wants the inquiry to recommend compensation, a call that is likely to meet resistance.

He points to the Sterling home he's about to move out of when making his point.

"I organised this place, to live here for the rest of our days," he said. 

"Now I have to pull it down."