The Australian Securities and Investments Commission (ASIC) is continuing its investigations into the principal of CFS Private Wealth and Combined Financial Solutions Pty, Graeme Walter Miller despite the Federal Court winding up the business and restraining Miller from providing financial services for 25 years.
Miller was also disqualified from managing corporations for three years.
ASIC confirmed its continued inquiries at the same time as announcing the Federal Court decision, noting that since 2008, Miller advised clients of CFS Private Wealth, many of them self-managed superannuation funds, to transfer over $4.7 million to another related company, CFS Corporation Pty Ltd, apparently for investment purposes.
It said Miller had instead used those funds for his own personal purposes and to make interest payments to other clients – conduct described by the Federal Court judge, Reeves, as a ‘blatant misuse of investor funds’.
The ASIC announcement said that, in restraining Miller from providing financial services for 25 years, Justice Reeves had regard to Miller’s “frequent and ongoing misuse of his clients’ superannuation savings for personal purposes over a number of years, in a long series of transactions which displayed what I consider to be a serious degree of personal dishonesty”.
In his judgement, Justice Reviews said he found “no evidence that Mr Miller had demonstrated any remorse for, or shown any appreciation of, the disastrous effects of his wrongdoing on his erstwhile clients…[and] no evidence that Mr Miller has any prospects of reforming his behaviour”.
The Court also found that CFS Private Wealth:
- failed to provide financial services efficiently, honestly and fairly, in contravention of s912A of the Corporations Act 2001;
- failed to lodge its financial reports with ASIC for the 2016 and 2017 financial years;
- lodged its financial reports for the 2010, 2011, 2013, 2014 and 2015 financial years after the due date;
- had insufficient assets to meet the conditions of its financial services licence; and
- did not adequately document client investments, including client names, amounts invested, amounts repaid (if any) and the name of the company invested in.
The Court has appointed Jamie Harris and Anthony Connelly of McGrath Nicol as liquidators of CFS Private Wealth and Combined Financial Solutions Pty Ltd.
ASIC said it had sought the reinstatement and winding up of a third related company, BDM Asia Pacific Pty Ltd (formerly known as CFS Corporation Pty Ltd), however the Court had declined to make such orders and ASIC was reviewing the judgement in this regard.
The regulator said its investigation into Miller was continuing.