The Australian Securities and Investments Commission (ASIC) has banned a Melbourne-based financial adviser permanently for misappropriating his clients’ funds from SMSFs he set up for them and using the money for personal gain.
The corporate regulator took the enforcement action against Terence Rio Nugara, who was the sole director of Skynet Financial Services from 2009 to 2019, after finding he had engaged in “deliberate, repeated and extended” misconduct over several years. Between 2013 and 2017, Nugara and Skynet Financial Services were operating under the Australian financial services licence of Financial Services Partners.
An ASIC investigation revealed Nugara deceived clients into investing in non-existent property development projects across Melbourne and misrepresented the significant returns that these projects would generate for investors.
Specifically, he advised clients to roll over more than $1.6 million from their superannuation accounts and deposit those funds into SMSFs he established and managed. He then used these monies for his own gain, including to settle personal debts.
Throughout the process the financial adviser did not respond to ASIC’s concerns.
The punitive action means Nugara has been permanently prohibited from providing any financial service, controlling an entity that carries on a financial services business and performing any function involved in carrying on a financial services business.
He has the right to take the matter to the Administrative Appeals Tribunal and ask it to review ASIC’s decision which has been recorded on the Banned and Disqualified Persons Register.
In addition to the ASIC banning, Nugara has been charged with 35 counts of obtaining financial advantage by deception and is currently in the custody of Victorian police, having been arrested.
The enforcement action taken by ASIC comes after an ex-financial adviser was jailed for six years last week for using funds from his clients’ SMSF accounts for personal use and business expenses.