The Federal Court of Australia has wound up financial services firm CFS Private Wealth and its authorised representative Combined Financial Solutions
It has also banned the firm’s director, Graeme Miller, from providing financial services for 25 years, following an Australian Securities and Investments Commission (Asic) investigation. Miller is also disqualified from managing corporations for three years.
The court found that CFS Private Wealth:
- Failed to provide financial services efficiently, honestly and fairly, infringing 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.
Asic had requested the reinstatement and winding up of a third related company, BDM Asia Pacific (formerly known as CFS Corporation), but the court declined to make such orders.
The regualtor is reviewing this decision.
Miller
Since 2008, Miller had “advised clients of CFS Private Wealth, many of them self-managed superannuation funds, to transfer over A$4.7m (£2.6m, $3.4m, €3m) to another related company, CFS Corporation, apparently for investment purposes”, the court said.
Miller instead used those funds for his own personal purposes and to make interest payments to other clients – conduct described by justice Reeves as a “blatant misuse of investor funds”.
In handing down the 25 year ban, Reeves said 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, displayed […] what I consider to be a serious degree of personal dishonesty”.
Reeves found “no evidence that 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 Miller has any prospects of reforming his behaviour”.
Asic’s investigation into Miller is continuing.
