ASIC has cancelled the Australian financial services (AFS) licence of Wealth Trail after the Compensation Scheme of Last Resort (CSLR) made a payment for a complaint against the firm.
Wealth Trail, which entered voluntary liquidation on 30 April, failed to pay an Australian Financial Complaints Authority (AFCA) determination from April, resulting in the CSLR providing $150,000 in compensation to the client on 11 September.
As part of the implementation of the CSLR, ASIC is required to cancel the licence of any firm that fails to pay an AFCA determination, and the CSLR subsequently pays compensation. The cancellation is also not subject to discretion or merits review.
The payment relates to the conduct of former Wealth Trail authorised representative Anthony Del Vecchio, who was employed as an adviser at Freedom Finance Australia – at the time a corporate authorised representative of Wealth Trail – from November 2016 until October 2023, when his employment was terminated.
In March this year, he pleaded guilty to 24 charges of obtaining financial advantage by deception, resulting in the County Court of Victoria handing down a sentence of seven years and six months’ imprisonment with a non-parole period of four years.
Over the course of almost four years, from February 2020 to December 2023, Del Vecchio used his position as a financial adviser to convince family, friends, and clients to transfer money to him under the pretext of investing their funds.
In some cases, he provided documents using the Freedom Finance letterhead to purport the terms of their investment in term deposits, bonds, or shares, although no financial product was ever purchased. The hit to victims spanned a wide range, from as little as $4,257 to a high of almost $1.2 million for a total of $4.48 million, which was deposited into his Commonwealth Bank of Australia accounts.
Del Vecchio stole the money to feed what Judge Gabriele Cannon called a “raging gambling addiction”, with Del Vecchio holding accounts with 52 different betting companies. While this began with $100 per week, it quickly spiralled to thousands of dollars a day.
“You breached the trust that the victims placed in you as a financial adviser and in many instances, as a friend and/or family member, callously taking advantage of such relationships to commit the offences,” Judge Cannon said.
Following his sentencing in April, ASIC permanently banned Del Vecchio from providing financial services in September.
Wealth Trail and Freedom Finance Australia had also sued Del Vecchio, with the Federal Court ruling in the firms’ favour in August, making a judgment for “damages and/or equitable compensation, to be assessed within 12 months of the date of these orders”.
“Neither the facts pleaded, nor the evidence tendered in support of the application, allow for the sum of damages or equitable compensation to be quantified,” Justice Button wrote in the judgment.
