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Thursday 26 July 2007

07-202 ASIC bans Sydney financial advisor for three years

ASIC has banned Mr Daniel Robert Gara, of Woollahra, New South Wales, from providing financial services for three years.

Mr Gara was an authorised representative for Fundamental Group Pty Ltd (In Liquidation), an Australian financial services licensee from October 2003 until July 2005 and has been an authorised representative of Peppertree Financial Pty Ltd from November 2005.

ASIC banned Mr Gara after an ASIC delegate found he had failed to comply with financial services laws and there was reason to believe that Mr Gara would not comply with these laws in the future.

ASIC found that Mr Gara:

  • advised seven clients to invest a total of $863,720 into an individually managed account (IMA) being a managed investment scheme operated by Fundamental Group. The IMA was involved in buying and selling shares;

  • gave misleading and deceptive advice in that the advice erroneously led the investors to believe they would have legal title to the funds they invested and the investments made from those funds when, in fact, this did not happen;

  • acted negligently in advising these clients to invest in the IMA in that he had failed to perform one of the most basic duties of a financial advisor, namely to know the financial product he was recommending; and

  • in his role as a financial advisor, contributed to the abovementioned seven clients losing a total of $708,720.

    Mr Gara has the right to lodge an application with the Administrative Appeals Tribunal for a review of this decision.

    Background

    Fundamental Group was a licensed financial services business which provided advice to retail clients, mostly in the eastern suburbs of Sydney. The company went into liquidation on 14 November 2006. Fundamental was referred to ASIC following a complaint from the administrator of the company, Mr Manfred Holzman of Holzman Associates. Mr Holzman found a number of irregularities concerning the way in which the IMA was being operated by Fundamental’s authorised representatives.

    ASIC’s investigation is continuing.

    Last updated: 23/03/2016 03:17