Plenty of ASIC bans and court action in 1H2023

Coming to the end of the 2022–23 financial year, Money Management has noted a busy first half for ASIC.

In a first, ASIC in March this year faced the situation of an adviser falsifying financial adviser exam results. It had been found that, in December 2021, Sydney-based Todd Karamian altered his Financial Adviser Certificate from a fail result to a pass result and sent the altered certificate to his Licensee, Bluepoint Consulting Pty Ltd, which was then subsequently provided to ASIC.

Along with that, notable regulatory action in 1H2023 was a strong stance against unlicensed finfluencers.

In April, ASIC commenced proceedings against Tyson Scholz for allegedly providing unlicensed financial services online under the moniker ASX Wolf. Just weeks later, it secured a significant sentence against unlicensed individuals like Gabriel Govinda, known online as Fibonarchery, for market manipulation conducted on online forum HotCopper.

Here’s a round-up of all the other regulatory action in the first half of 2023. 

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January

Early in the month, Adelaide-based adviser Tai Thanh Nguyen was sentenced for falsifying seven documents relating to two of his clients by inserting client signatures and by adding dates to documents. He was banned in 2019 and charged in June 2022.

Meanwhile, Bradley Grimm of Melbourne pleaded guilty to three counts of engaging in dishonest conduct whilst running a financial services business.

Gregory William Finerty, the director of a business that leased an automated FX trading robot, was banned for four years for carrying on a business without an AFSL and engaging in misleading and deceptive conduct.

February
A former chief executive, Akhilesh Kamkolkar, pled guilty to two counts of engaging in dishonest conduct in relation to financial products or services for obtaining nearly $1 million from four investors and failing to invest those funds according to their instructions.

Sean John Sweeney of Sydney was permanently banned after he was convicted of fraud offences in November 2022. 

Another adviser, Rahul Goel, was permanently banned and sentenced after dishonestly obtaining over $35,000 from his clients’ superannuation. After obtaining the super details of a number of First Nations clients, he falsified benefit access applications or hardship applications and retained up to 100 per cent of the payout in fees. He had previously been jailed for 18 months in December 2022. 

A stay application on the ban of adviser Jeneve Matai, who was first banned in December 2022, was also denied by the Administrative Appeals Tribunal (AAT) in February. In reviewing a sample of advice provided by Matai, ASIC found that Matai did not act in the best interests of clients, the "layered advice" provided was not appropriate, and he prioritised his interests (or that of his AFS licensee) over the interests of the client.

March

Douglas Cecil Allen was banned from providing financial services for three years for using a “layered advice” strategy and providing advice that was not in the clients’ best interests, was not appropriate, and made false or misleading statements.

Later that month, former financial services director Mark McCabe was charged with eight counts of dishonestly obtaining a financial advantage by deception in the amount of $940,350 from eight people, seven of whom were clients of his companies.

Sydney-based Russell Sandiford was charged with dishonest conduct after he obtained $459,000 from 79 clients and used the funds for his own benefit rather than investment purposes as had been agreed with clients. 

April

Brisbane-based former financial adviser Kristofer Ridgway was permanently banned for promoting international unlisted shares in pre-IPO companies, losing some $6.7 billion of client funds. 

Former director Anthony Keith Silver (also known as Tony Silver) was sentenced to eight years and six months’ imprisonment for fraud, misappropriating $1.8 million by transferring investor funds to his personal bank account, making payments to company employees, and paying returns to other investors. 

Gold Coast director Darren Brown was banned for eight years for promoting illegal early release of super for clients to buy a home or pay personal debts.

Adviser Brett Gordon was sentenced to six years’ imprisonment for withdrawing funds without authorisation from his clients’ SMSF accounts and dishonestly using those funds for personal debts and expenses, and his financial planning business expenses.

May

A former contractor, Athan Papoulias, was sentenced to two years’ imprisonment for his role in a $180 million Ponzi scheme. 

Fund manager Gregory Tolpigin was banned for three years after he was found to have engaged in naked short selling on 150 occasions totalling over $7 million.

Holly Marie Grofski, of Brisbane, was sentenced relating to offences involving the falsification of documents and the provision of false information to an auditor in her role as managing director of Global Merces Funds Management. 

Mid-May, Brisbane financial adviser Stephen Garry Vick’s appeal to the AAT on his five-year ban was denied. ASIC found he failed to act in the best interests of clients when he recommended his clients roll over their existing super to a newly-established SMSF and borrow to invest in residential property. He was banned in September 2022. 

June

Michael David Steele was charged with seven counts of fraud for misleading 14 investors into withdrawing funds from their employer superannuation funds and savings accounts to invest in a property development. He withdrew more than $1.3 million of the invested funds from the company bank accounts and used the money for purposes other than the property development.

Adviser John Wertheimer received a permanent ban for making 48 unauthorised transactions on the trading accounts of clients using the Netwealth online trading platform. He also lodged five investment instruction documents that contained forged signatures. He had been charged with 18 months imprisonment in late January 2023. 

This month, the District Court of Western Australia found Perth-based adviser Mark Sebo to be guilty on 36 counts of stealing. He had been accused of duping eight clients into transferring some $1 million from their superannuation accounts into personal online gambling accounts between July and August 2019.