dishonest conduct

Former financial adviser permanently banned for dishonest conduct

Former financial adviser permanently banned for dishonest conduct

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.

ASIC permanently bans South Australian financial adviser

 ASIC permanently bans South Australian financial adviser

ASIC has permanently banned Mr David Mario Alafaci, of Morphett Vale, South Australia from providing financial services on the basis that he is not of good fame or character.

John Dimitropoulos permanently banned by ASIC from financial services and credit in connection with property and SMSF spruiking

John Dimitropoulos permanently banned by ASIC from financial services and credit in connection with property and SMSF spruiking

Mr Dimitropoulos' banning arises from ASIC's ongoing investigation into a property and self-managed superannuation fund (SMSF) promoting group, which includes the companies formerly called Heritage Financial Solutions Australia Pty Ltd (in liq) (Heritage Financial Solutions) and Sunpac Finance Pty Ltd (Sunpac Finance).

Call to remove 'bad apples' from the financial planning industry

Ten years on from when the regulator first called for the removal of bad apples from the financial planning industry, there's been not enough progress. 

Read more from the Sydney Mornigng Herald here.

ASIC permanently bans former Easy Capital director Mr Yingjie Wang

Financial Advice

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.

Former Westpac Home Finance Manager sentenced to 3 years imprisonment after pleading guilty to dishonest use of his position

ASIC.jpg

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.

Background

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.

 

16-135MR South Australian director charged with misappropriating $1.8 million in SMSF property investments

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.

Background

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.

Previous media releases in relation to this matter incude 14-024MR and 15-048MR.

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.

16-388MR Former financial adviser jailed for forgery and misuse of client assets

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.

Background

In February 2016, ASIC permanently banned Mr Wise from providing financial services (refer: 16-032MR).

 
ASIC
 

16-357MR Federal Court declares 21st Century land banking schemes to be unlawful and bans Jamie and Dennis McIntyre for 10 years

The Federal Court has declared that land banking developments operated by Jamie and Dennis McIntyre were unregistered managed investment schemes in a decision delivered by His Honour Justice Bromwich on 17 October 2016. 

The Court also made orders that Jamie and Dennis McIntyre be disqualified from managing corporations and restrained from carrying on financial services for a period of 10 years each, due to them being officers of companies that had failed, by virtue of them being wound up, and which had also repeatedly contravened the Corporations Act .

Jamie and Dennis McIntyre agreed to the banning orders made against them.

Further, the Court made orders to wind up the unregistered managed investment schemes, which were promoted and advertised by the 21stCentury land banking companies*.

The unregistered managed investment schemes are known as:

  • Botanica, located at 805 Archer Rd, Kialla, Victoria 3631
  • Secret Valley Estate, located at955, Old Sydney Road, Bylands, Victoria 3762
  • Oak Valley Lakes Estate & Resort, located at 124 Booth Road, Brookhill, Townsville, Qld 4816
  • Bendigo Vineyard Estate & Resort, located at51 Andrews Road, Bendigo, Victoria 3551
  • Melbourne Grove Estate, located at1491 Dohertys Road, Mount Cottrell, Victoria 3024

Simon Wallace-Smith and Robert Woods of Deloitte have been appointed as joint liquidators of the unregistered managed investment schemes.

ASIC Commissioner Greg Tanzer said, "The high banning periods ordered by the Court in this case are necessary to protect the public from those who are officers of companies that repeatedly contravene the Corporations Act.  It also serves as a warning to those involved in unlawful unregistered managed investment schemes, including those that involve land banking, that ASIC will take action."

ASIC's investigation into the matter is ongoing.

Background

ASIC commenced proceedings in August 2015 against Jamie and Dennis McIntyre and the 21st Century land banking companies in relation to their promotion and sale of interests to investors in five land banking schemes (Refer: 15-214MR).

ASIC’s proceedings are part of ASIC's wider and ongoing investigation into land banking schemes.

More information about ASIC's proceedings, including frequently asked questions

*Jamie McIntyre refers to his companies as the "21st Century Group". 21st Century Group Pty Ltd (ACN 108 150 545) is not a defendant to the proceeding, and ASIC is not aware of any connection between 21st Century Group Pty Ltd and the defendants.

16-327MR Former financial adviser charged over fraud

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.

Background

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.