A former financial adviser who advised clients to set up self-managed superannuation funds (SMSFs) but used the money for his own purposes has been sentenced to 10 years jail in the District Court of NSW.
In what represents one of the longest recent sentences relating to financial advice, the man, Gabriel Nakhl was convicted of engaging in dishonest conduct in relation to eight charges brought by the Australian Securities and Investments Commission (ASIC).
ASIC said the conduct affected 12 investors involved with Nakhl while he was a representative of Australian Financial Services (in liquidation) and as a sole director of SydFA Pty Ltd (deregistered).
The court found that Nakhl advised clients to set up self-managed superannuation funds and to invest their superannuation and other funds in products such as shares, managed funds and high interest rate bank accounts but, rather than investing the funds, Nakhl used the funds “as he pleased” for his own purposes.
It said Nakhl then lied to the investors, telling them that he had invested their funds in accordance with his advice and that their investments were performing well.
Nakhl also tried to cover up his wrongdoing by having the 12 investors sign documents that supposed authorised him to use the funds the way he did.
ASIC said the 12 investors allowed Nakhl to invest approximately $6.7 million on their behalf, and that he lost approximately $5.1 million of these invested funds.
Nakhl was the subject of ASIC freezing order action in 2013, became bankrupt in September 2013 and was permanently banned in November, 2013.