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
Digital advice tools are on the rise, but licensees will need to ensure they still meet adviser obligations or potentially risk a class action if clients lose money from a rogue algorithm.
Shaw and Partners has merged with Sydney wealth manager Kennedy Partners Wealth, while Ord Minnett has hired a private wealth adviser from Morgan Stanley.
Australian investors are more confident than their APAC peers in reaching their financial goals and are targeting annual gains of more than 10 per cent, according to Fidelity International.
Zenith Investment Partners has lost its head of portfolio solutions Steven Tang after 17 years with the firm, the latest in a series of senior exits from the research house.
And it's licensed financial advisers who pay for ASIC to prosecute these unlicensed folks...