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Monday 21 January 2019

19-009MR Court winds up CFS Private Wealth and bans adviser for 25 years

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

Since 2008, Mr Miller advised clients of CFS Private Wealth, many of them self-managed superannuation funds, to transfer over $4.7 million to another related company, CFS Corporation Pty Ltd, apparently for investment purposes. Mr Miller instead used those funds for his own personal purposes and to make interest payments to other clients – conduct described by Justice Reeves in his judgement as a ‘blatant misuse of investor funds’.

In restraining Mr Miller from providing financial services for 25 years, Justice Reeves had regard to Mr Miller’s ‘frequent and ongoing misuse of his clients’ superannuation savings for personal purposes over a number of years, in a long series of transactions which displayed what I consider to be a serious degree of personal dishonesty’.

Justice Reeves found ‘no evidence that Mr Miller had demonstrated any remorse for, or shown any appreciation of, the disastrous effects of his wrongdoing on his erstwhile clients…[and] no evidence that Mr Miller has any prospects of reforming his behaviour’.

The Court also found that CFS Private Wealth:

  • failed to provide financial services efficiently, honestly and fairly, in contravention of s912A of the Corporations Act 2001;
  • failed to lodge its financial reports with ASIC for the 2016 and 2017 financial years;
  • lodged its financial reports for the 2010, 2011, 2013, 2014 and 2015 financial years after the due date;
  • had insufficient assets to meet the conditions of its financial services licence; and
  • did not adequately document client investments, including client names, amounts invested, amounts repaid (if any) and the name of the company invested in.

The Court has appointed Jamie Harris and Anthony Connelly of McGrath Nicol as liquidators of CFS Private Wealth and Combined Financial Solutions Pty Ltd.

ASIC had sought the reinstatement and winding up of a third related company, BDM Asia Pacific Pty Ltd (formerly known as CFS Corporation Pty Ltd), however the Court declined to make such orders. ASIC is reviewing the judgement in this regard.

ASIC's investigation into Mr Miller is continuing.

Download a copy of the judgment here.

Background

On 21 May 2018, the Court made interim orders restraining Mr Miller and the corporate respondents from dealing with their assets and investor funds (see 18-132MR). Those orders have now been discharged.

Clients of CFS Private Wealth Pty Ltd can contact the liquidator’s office as follows:

Email:             FM-CFSGroup@mcgrathnicol.com

Telephone:      (07) 3333 9800 (ref: Harry Given)

Last updated: 21/01/2019 03:41