Adviser found guilty of fraud
A former South Australian financial adviser who converted the proceeds of client cheques for his own use has been found guilty of fraud in the District Court of Adelaide.
Following an investigation by the Australian Securities and Investments Commission (ASIC), Michael Smith who was an adviser with Mossbrook, pled guilty to three charges, admitting that he used over $80,000 of client monies for personal or business reasons. The fraudulent activities were conducted from 1996 to 2002.
ASIC also alleged that Smith had dishonestly concealed facts in order to encourage his clients to deal in securities.
However, Smith was found not guilty of the 11 charges relating to the latter offence.
ASIC has now permanently banned Smith from acting as a representative of a securities dealer, investment adviser or holding an Australian financial services licence.
Smith has been remanded on bail prior to sentencing.
Mossbrook went into receivership in early 2004.
Meanwhile, a former insurance agent has a been banned from providing financial services for a five-year period.
Following an investigation by the Australian Securities and Investments Commission (ASIC), Leon Shields, trading as Life Planners in Victoria, was found to have engaged in misleading and deceptive conduct in relation to his client’s life insurance policies.
According to ASIC, Shields had not complied with financial services law, by failing to disclose risk elements on a total of 33 insurance applications.
As a result, 23 clients were forced to have their insurance policies rewritten, while one individual had their claim rejected by the insurance provider.
Shields acted as an insurance agent for a number of insurance companies from October 1998 to August 2003.
In issuing the five-year ban, ASIC stated that it was unlikely that Shields was likely to comply with financial services law in the future.
Mark Steward, deputy director of enforcement, said: “Financial advisers who mislead both consumers who need insurance and the insurers pose a significant threat.”
Recommended for you
With the final tally for FY25 now confirmed, how many advisers left during the financial year and how does it compare to the previous year?
HUB24 has appointed Matt Willis from Vanguard as an executive general manager of platform growth to strengthen the platform’s relationships with industry stakeholders.
Investment manager Drummond Capital Partners has announced a raft of adviser-focused updates, including a practice growth division, relaunched manager research capabilities, and a passive model portfolio suite.
When it comes to M&A activity, the share of financial buyers such as private equity firms in Australia fell from 67 per cent to 12 per cent in the last financial year.
