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ASIC, Regulation

SMSF adviser banned for 25 years

An SMSF adviser who used more than $4.7 million of clients’ funds for his own purposes has been restrained from providing financial services for 25 years following court action initiated by ASIC.

Following an investigation by the corporate regulator, the Federal Court made the restraining order against Graeme Miller and also ordered the winding up of the Australian financial services licences of CFS Private Wealth Pty Ltd and Combined Financial Solutions Pty Ltd, of which Miller was a director.

ASIC claimed that since 2008, Miller had advised clients of CFS Private Wealth to transfer more than $4.7 million to a related company – CFS Corporation – for investment purposes, but instead used the funds for personal purposes and to make interest payments to other clients.

The court also found CFS Private Wealth failed to provide financial services efficiently, honestly and fairly, in contravention of the Corporations Act; 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 in which investments were made.

ASIC said many of Miller’s clients were investors in SMSFs and in his judgment, Justice John Reeves noted 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”.

Justice Reeves also 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 has appointed Jamie Harris and Anthony Connelly of McGrath Nicol as liquidators of CFS Private Wealth and Combined Financial Solutions.

ASIC first commenced court proceedings against Miller in May 2018 and said its investigation into him was continuing.

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