Court winds up SMSF firm over misuse of funds

Court winds up SMSF firm over misuse of funds

The Federal Court of Australia has wound up the AFSL of an SMSF firm after the director of the firm misused over $4.7 million in client money, including funds from SMSFs.

Following an ASIC investigation, the Federal Court of Australia has wound up Australian financial services licensee CFS Private Wealth Pty Ltd and Combined Financial Solutions Pty Ltd, a corporate authorised representative of CFS Private Wealth.

It also restrained its director, Graeme Walter Miller, from providing financial services for 25 years. Mr Miller has also been disqualified from managing corporations for three years.

 

Following an investigation, ASIC alleges that Mr G W Miller:

• recommended that clients of CFS Private Wealth establish self-managed superannuation funds (SMSF) and use their SMSF funds to invest in CFS Corporation, of which Mr Miller was a director;
• used investor funds for personal use and to repay other investors in CFS Corporation;
• failed to keep proper records of client investments in CFS Corporation;
• continued to operate the bank account of CFS Corporation after it was deregistered;
• submitted illegitimate life insurance applications to insurers in order to receive commissions, in circumstances where the insureds had not instructed him to submit applications on their behalf and were not aware that he had done so; and
• may be continuing to provide financial services and/or raise funds from clients.

An unfortunate coincidence...

This rogue is not to be confused with Graeme Miller. CIO of Telstra Super who IS NOT the above person. Unfortunate name coincidence that may get a few raised eyebrows

 

Unfortunately (or fortunately) we are hearing about these at least weekly.

Unfortunate - as people are getting ripped off by rogue operators and giving "SMSF" a bad name. Unfortunate as ASIC prosecutes the license but does not protect the clients. They would have to persue damages individually. I feel for them.

Fortunate: It has been prosecuted which will provide some satisfaction, however will not fix the losses incurred.

For all the people that get prosecuted, they still pop up - under different names or under a different license in the background. I have reported these operators to asic, with no action.

Cheers, Ivan

 

Yes the nature of SMSFs means it money and it attracts thieves.

Of concern is a growing number of tax agents who seem to be pinching clients tax refunds or asking the client to pay the BAS to the tax firm. The ATO has tolerated tax agents trust accounts but those days look like coming to an end so the days of the fee from refund may come to a end. Its horrendously expensive to handle such refunds and many firms (like us) dont offer it. It attracts a different type of client too.