The District Court of South Australia has sentenced a former Adelaide-based adviser to a 10 year prison term with a non-parole period of seven years for stealing nearly $5 million from clients.
James Gibbs had previously pleaded guilty to theft and dishonesty charges while he was a director of James Gibbs Investments.
An Australian Securities and Investments Commission (ASIC) investigation found Gibbs, when given the authority to run his clients’ SMSFs and open new accounts on their behalf, stole $4.88 million and used it to finance his own business, pay off his credit card debt and for gambling purposes.
Further, ASIC established Gibbs created false bank documents and member statements with incorrect investment return information to hide his theft.
The illegal activity took place between August 2009 and July 2016.
ASIC commissioner Danielle Press said: “Clients need to be able to trust their financial advisers and, in this case, Mr Gibbs breached that trust.
“ASIC’s investigation revealed that Mr Gibbs deliberately withheld information from clients to avoid detection. Financial advisers should always allow clients to access information about their own investments and clients should be concerned if this is not occurring.”
Judge Michael Boylan described Gibbs’ actions as “cruel” and “despicable”, and involving a “gross breach of trust” and as such considered the defendant’s crimes as those of a more serious nature.
Gibbs has also been disqualified from managing a corporation for five years as a result of his actions.
The legal action was handled by the Commonwealth Director of Public Prosecutions.
Gibbs had previously pleaded guilty to the charges against him on 4 February.