ASIC has permanently banned Mr Grant Desmond Taylor, of Montmorency, Victoria from providing financial services after finding he engaged in dishonest and deceptive conduct towards his clients. ASIC also found that Mr Taylor was not of good fame or character.
Mr Yingjie Wang (also known as Jay Wang)
A Lawyer and accountant from Sydney NSW, has been permanently banned from providing financial Services
Since June 2011, Mr Wang has been involved in the management of at least 14 companies who hold, or held, an Australian Financial Services (AFS) licence. These companies include:
- LSG Group Pty Ltd (ACN 154 582 242) (formerly known as NZ Global Financial Trading Pty Ltd and Easy Capital Global Pty Ltd);
- Eagle Aetos Capital Pty Ltd (ACN 150 010 736) (formerly known as GSM Financial Group); and
- Hodgson Faraday Ltd (ACN 130 606 987) (formerly known as TM Index).
ASIC found Mr Wang was dishonest in that he knowingly caused Easy Capital Global Pty Ltd to use $100,000 of an investor's money for unauthorised purposes. Mr Wang also remained silent about a representation made to this same investor concerning the money which he knew to be false.
When examined by ASIC, Mr Wang was not forthcoming about his dishonesty and ASIC therefore found that Mr Wang was not of good fame and character.
ASIC Commissioner John Price said, 'ASIC will take action to remove dishonest persons from the financial services industry to protect the public.'
Mr Wang is seeking a review of ASIC's decision in the Administrative Appeals Tribunal.
Following an ASIC investigation, Mr. David St Pierre, a former Westpac Home Finance Manager, has been sentenced in the Southport District Court to 3 years imprisonment, to be released after 6 months on a recognisance order.
On 2 November 2016, Mr St Pierre pleaded guilty to three counts of dishonest use of his position, with the intention of directly or indirectly gaining an advantage for himself or others.
ASIC alleged that between July 2008 and June 2010, Mr St Pierre dishonestly used his position and submitted loan applications for approval when he knew they contained false information and false documents.
Mr St Pierre obtained over $2.5 million for Westpac customers, that they invested with a now failed Tasmanian property development scheme, operated by Capital Growth International Club Pty Ltd (CGIC) and All About Property Developments Pty Ltd (AAPD) (refer: 15-137MR).
In delivering the sentence, Judge Kent QC remarked that Mr St Pierre's behaviour was described accurately in his opinion by the Crown as calculated, elaborate, determined and not a fleeting mistake.
ASIC Commissioner Peter Kell said: "Mr St Pierre's actions betrayed the trust of his clients and caused them significant financial harm. This sentence showed such behaviour will not be tolerated.'
The matter was prosecuted by the Commonwealth Director of Public Prosecutions.
Mr St Pierre's recognisance is in the sum of $1000, conditioned that he be of good behaviour for a period of 3 years.
ASIC's investigation found that the customers to whom the loan applications related were elderly and vulnerable and with limited financial means, yet in spite of this, Mr St Pierre encouraged them to borrow against their homes, some of which were unencumbered, to invest with CGIC and AAPD, which promised returns of 12–20% per annum.
The customers received monthly interest payments from CGIC and AAPD after they invested, however the interest payments stopped shortly before a liquidator was appointed on 28 February 2011. This left customers without sufficient income with which to repay their loans to Westpac.
Westpac has compensated customers who obtained loans from Westpac through Mr St Pierre in relation to amounts they invested in CGIC. Westpac has also compensated investors who did not borrow funds from Westpac but claimed to have had some direct contact with Mr St Pierre before making their investment in CGIC. ASIC acknowledges Westpac's commitment to achieving a resolution for the benefit of CGIC investors. (refer: 14-264MR).
In March 2014, ASIC permanently banned Mr St Pierre from engaging in credit activities and providing financial services (refer: 14-043MR).
ASIC'S investigations into CGIC, AAPD and its officers are ongoing.
Following an ASIC investigation, Mr George John Nowak has appeared in the Adelaide Magistrates Court charged with thirty one counts of deception and one count of dishonest dealings with documents.
ASIC investigated Mr Nowak's conduct in dealing with members of self-managed superannuation funds (SMSFs) who were undertaking property purchases offered by companies of which he was a director, including EJ Property Developments Pty Ltd. It is alleged that Mr Nowak misappropriated $1.8 million in SMSF monies by not holding funds in a designated account and by not applying those funds towards the intended property purchase.
Mr Nowak was not required to enter a plea and was granted conditional bail. The matter is listed for return at the Adelaide Magistrates Court on 12 July 2016.
The Commonwealth Director of Public Prosecutions is prosecuting these matters.
The charges of deception contrary to section 139(b) of the SA Criminal Law Consolidation Act 1935 each carry a maximum penalty of ten years imprisonment.
The charge of dishonest dealings with documents contrary to section 140 of the SA Criminal Law Consolidation Act 1935 carries a maximum penalty of ten years imprisonment.
In 2012 in response to the growth in SMSFs, ASIC established the SMSF Taskforce. The Taskforce continues to meet regularly to examine high-risk and emerging SMSF issues such as property spruiking to SMSFs, unlicensed conduct and false and misleading advertising of SMSFs.
Outcomes and actions stemming from the SMSF Taskforce include:
- ASIC accepted an enforceable undertaking (EU) from CMH Financial Group Pty Ltd and the sole director, Daniel White, after an ASIC surveillance found CMH had failed to provide advice about self-managed superannuation funds that was appropriate and in the best interests of clients (refer 16-097MR);
- Ms Sarah Jane Busteed was charged with three counts of dishonestly obtaining a financial advantage by deception and one count of dealing with over $100,000 that was the proceeds of crime (refer: 16-040MR);
- Superannuation Warehouse Australia Pty Ltd was ordered to pay a penalty of $25,000 for false and misleading“Free SMSF Setup” advertising (refer: 15-332MR).
- The Supreme Court of NSW found Park Trent Properties Group Pty Ltd had been unlawfully carrying on a financial services business for over 5 years by providing advice to clients to purchase investment properties through a SMSF (refer: 15-300MR).
- Dixon Advisory Group Limited complied with two ASIC infringement notices, paying two $10,200 penalties after including potentially misleading claims on its website (refer: 15-207MR).
- The credit licence of Queensland-based Smithson & Baye was cancelled following an investigation into a property and SMSF promoting group (refer: 15-228MR)
- ASIC released two information sheets to improve the quality of advice provided by advisers onSMSFs: Information Sheet 205 Advice on self-managed superannuation funds: Disclosure of risks(INFO 205) and Information Sheet 206 Advice on self-managed superannuation funds: Disclosure of costs (INFO 206) (refer 15-192MR).
- Omniwealth Services paid a $10,200 penalty for potentially misleading claims on its website (refer: 15-190MR).
- The principal of Sherwin Financial Planners, Bradley Thomas Sherwin, was charged with fraud. The charges relate to the use of SMSFs of former clients of Sherwin Financial Planners (refer: 15-158MR).
- The Federal Court of Australia ruled that Craig Gore and several other parties and financial services businesses, including Queensland-based ActiveSuper and Royale Capital, contravened sections of the Corporations Act or were knowingly concerned in those contraventions. (refer: 15-134MR)
- Australian Financial Planning Solutions Pty Ltd paid $10,200 in penalties for potentially misleading SMSF ads (refer: 15-052MR).
- ASIC banned the founder of the Charterhill Group of Companies, George Nowak, from providing financial services until 3 July 2017 on the basis that Mr Nowak is an undischarged bankrupt (refer: 15-048MR).
- Interprac Financial Planning agreed to address ASIC concerns relating to advice provided to some clients about SMSFs (refer: 14-258MR).
- Sentry Financial Services agreed to address ASIC concerns about SMSF advice provided to clients (refer: 14-109MR).
- SuperHelp Australia paid a $10,200 penalty after making potentially misleading statements about the cost of setting up SMSF (refer: 14-051MR).
- Media Super paid $10,200 in penalties for potentially misleading SMSF ads (refer: 14-001MR).
- Spring Financial Group entered into an enforceable undertaking following ASIC concerns about the level of monitoring and supervision of its representatives (refer: 13-263MR).
- Anne Street Partners agreed to engage an independent expert following ASIC concerns about SMSF advice provided to clients (refer: 13-248MR).
- We published Report 337 Improving the quality of advice given to SMSF investors. (refer: 13-081MR).
SMSFs will continue to be a focus in ASICs enforcement work.
Editor's note 1:
On 12 July 2016, declarations were filed at the Adelaide Magistrates Court. The matter was listed for return on 22 September 2016 in the Adelaide Magistrates Court for Mr Nowak to enter a plea.
Editor's note 2:
On 22 September 2016, the matter was adjourned until 13 October 2016.
Editor's note 3:
On 13 October 2016, the matter was adjourned until 10 November 2016.
Editor's note 4:
The matter has been further adjourned until 19 January 2017.
Former financial adviser, Mr Darren John Wise, has been sentenced in the Maroochydore District Court to seven years imprisonment on charges brought by ASIC. Mr Wise will be eligible for parole after serving 20 months.
Mr Wise, formerly of Rhodes NSW, had earlier pleaded guilty to one count each of forgery, using forged documents and fraud.
The charges related to Mr Wise's conduct between 23 October 1997 and 10 March 2006, when, as a financial adviser at Kawana Waters in Queensland, he:
- created six applications for margin loans on which he forged eight of his clients' signatures, the effect of which was to represent that the clients had agreed to act as guarantors for the margin loans;
- used the false margin lending applications with the intention of fraudulently inducing the lender to provide him margin loans; and
- on 67 separate occasions gained a benefit for himself by fraudulently lodging securities owned by clients as collateral for the margin loans without the clients' authorisation.
Mr Wise dishonestly obtained a total of $1,070,700 under the margin loans as a result of his misapplication of client assets. Mr Wise used the money for his own purposes including trading in securities on the ASX for himself, paying for losses in other trading accounts he held, and paying off personal debts.
ASIC Commissioner Greg Tanzer said, 'Mr Wise repeatedly engaged in dishonest conduct, putting his own interests ahead of his clients. This type of conduct undermines trust and confidence in the financial advice industry and will not be tolerated by ASIC or the broader community. We will act to ensure financial advisers who act dishonestly are held to account for their actions'.
Mr Wise was sentenced on 14 November 2016.
The Commonwealth Director of Public Prosecutions prosecuted the matter.
In February 2016, ASIC permanently banned Mr Wise from providing financial services (refer: 16-032MR).
Former financial adviser, Gabriel Nakhl, appeared in the Local Court of New South Wales yesterday on 19 charges brought by ASIC of engaging in dishonest conduct with investor funds.
ASIC alleges that Mr Nakhl, of Illawong, NSW knowingly engaged in dishonest conduct in relation to twelve investors by:
- misleading them about the investments he would make on their behalf and on behalf of their self-managed superannuation funds, including how he would invest their money and the risks and returns of the investments he recommended;
- using money provided to him by investors, including money from investors' self-managed superannuation funds, for purposes other than those he said he would use it for;
- telling investors that their investments were performing well when this was not the case; and
- attempting to cover-up and conceal his wrongdoing.
The alleged conduct occurred between March 2009 and March 2011 while Mr Nakhl was an authorised representative of Australian Financial Services Limited (in liquidation) and from about March 2011 to about September 2013 while he was the sole director of SydFA Pty Ltd (in liquidation).
The charges were brought against Mr Nakhl following an ASIC investigation.
Mr Nakhl did not enter a plea but asked for an adjournment to obtain legal advice.
The matter was stood over until 11 October 2016.
The Commonwealth Director of Public Prosecutions is prosecuting the matter.
Mr Nakhl has been charged with 19 counts under section 1041G of theCorporations Act 2001 (Cth).
In February 2013, ASIC obtained court orders against Mr Nakhl preventing him from disposing of, dealing with or otherwise diminishing certain assets. See 13-023MR for more details.
In September 2013, Mr Nakhl became a bankrupt and placed SydFA Pty Ltd into liquidation.
In November 2013, ASIC accepted an enforceable undertaking from Mr Nakhl that permanently restricts him from providing financial services and restricts him from managing a corporation for 15 years. See 13-313MR for more details.
ASIC has permanently banned Mr Sandeep Madhoji from providing financial services or engaging in credit activity after he was sentenced to imprisonment for fraud charges. This prosecution was the result of a joint operation between the Queensland Police Service and ASIC.
The charges stemmed from conduct that occurred between 2 September 2010 and 11 July 2012. During this period, Mr Madhoji misused clients' funds by applying some client's funds to cover the loss made on other client portfolios.
As a result of Mr Madhoji's actions, 14 clients collectively lost $3,251,281. These losses were incurred by Mr Madhoji using his recommended trading strategy.
Mr Madhoji made false statements to his licence holder Redwood Capital Group and to his clients to conceal his losses. He acted outside his authority by making multiple unauthorised transfers and withdrawals from the accounts to hide the losses. Mr Madhoji also falsified client account statements in relation to the relevant transactions.
Mr Madhoji committed these offences to enhance his reputation to clients and create an illusion that he was a highly successful trader.
ASIC Deputy Chairman Peter Kell said, 'Dishonesty by any financial advisor will not be tolerated by ASIC. We will investigate and prosecute instances of dishonesty to ensure that consumers have confidence in the financial system.'
On 26 August 2016, Mr Madhoji was sentenced to 7.5 years imprisonment with a non-parole period of 22 months in the Brisbane District court on 55 charges of fraud under sections 408C of the Queensland Criminal Code.
Mr Madhoji was an Authorised Representative under Redwood Capital Group Pty Ltd, AFSL No. 289327. AFSL No. 289327 held by Redwood Capital Pty Ltd was cancelled on 9 April 2013.
Mr Madhoji's status as an Authorised Representative was ceased on 1 July 2012.
This matter was prosecuted by the Queensland Director of Public Prosecutions.