Former director pleads guilty to two counts of dishonest conduct
Russell Sandiford has pleaded guilty to two counts of dishonest conduct in relation to a financial product.
A former director of Reiwa-Capital, he first appeared in the Downing Centre Local Court in March 2023 and was prosecuted by the Commonwealth Director of Public Prosecutions following a referral from ASIC.
It is understood he obtained over $440,000 from 74 clients into bank accounts operated by him between January 2020 and June 2022.
He contacted the clients using email addresses obtained when he was previously employed as a market trader and analyst at various brokerage firms, and obtained the funds on the basis of investing for trading activity for the clients.
He offered the clients two investment opportunities, namely a “hedge fund” which offered a split of profits, for a nominal one-off fee, from a trading account operated by Sandiford trading in commodities and foreign exchange products; and an “income fund” under which investors would pay a capital investment amount on the basis it would be paid into a larger pool of funds to be used to trade foreign exchange products and commodities for the profit of investors.
However, the money was used by Sandiford for personal expenses or purposes unrelated to trading, contrary to section 1041G of the Corporations Act with section 1311.
This carries a maximum penalty of 15 years’ imprisonment or the greater of $945,000 or a fine of three times the total value of the benefits, or both.
A total of $6,316.68 of the $440,909.71 received was paid back to investors.
Sandiford was not licensed to provide financial product advice at the time of offending, ASIC noted.
He is now scheduled to appear before the Sydney District Court on 15 March 2024, at which time a date will be set for a sentence hearing.
AUTHOR
Rhea Nath
Recommended for you
The FSCP has announced its latest verdict, suspending an adviser’s registration for failing to comply with his obligations when providing advice to three clients.
Having sold Madison to Infocus earlier this year, Clime has now set up a new financial advice licensee with eight advisers.
With licensees such as Insignia looking to AI for advice efficiencies, they are being urged to write clear AI policies as soon as possible to prevent a “Wild West” of providers being used by their practices.
Iress has revealed the number of clients per adviser that top advice firms serve, as well as how many client meetings they conduct each week.
And it's licensed financial advisers who pay for ASIC to prosecute these unlicensed folks...