A former Melbourne-based SMSF adviser has been sentenced to 18 months’ imprisonment after being found guilty of three counts of engaging in dishonest conduct while running a financial services business.
Bradley Grimm was convicted by the County Court of Victoria after it found he engaged in dishonest conduct on five occasions between 18 February 2015 and 12 March 2015 when he transferred funds from two of his clients’ SMSFs to three companies of which he was the sole director.
Additionally, on seven occasions between 5 November 2015 and 11 November 2015, Grimm dishonestly transferred shares and convertible notes owned by his clients’ SMSFs to Equity Capital Partners Hedge Fund Pty Ltd and did not adequately advise them he was the sole director of the company and had a personal interest in it.
The Australian Securities and Investments Commission (ASIC), which first took action against Grimm in 2016 by banning him for 20 years, added he also failed to advise his clients the regulator had sought the winding up of entities related to him, including Ostrava Equities Pty Ltd, and he was banned from providing financial services by order of the Federal Court.
Grimm and Ostrava Equities were authorised representatives of former Australian financial services licensee Marigold Falconer International Limited.
As a result of these actions, Grimm received the 18-month sentence, which has nine months left to serve, and he must be of good behaviour for a period of 18 months upon release pursuant to a recognisance in the amount of $5000.
In sentencing, Justice O’Connell stated Grimm was “well aware of his obligations” and he “abused the position of trust that a licensed financial adviser holds”, and also found his “moral culpability was high”.
Following Grimm’s banning in 2016, the Federal Court ordered the winding up of a number of companies linked to Ostrava Equities, as well as those involved in the transfer of assets from his clients’ SMSFs. He first appeared before the court on 29 November 2018 and entered a plea of guilty on 20 January 2023.
