A former financial adviser has been sentenced to 10 years jail for dishonest conduct with investor funds, in relation to SMSFs.
ASIC noted that the District Court of New South Wales had sentenced Gabriel Nakhl to 10 years imprisonment, after he convicted on eight charges in June. The charges had been brought by ASIC.
The charges relate to conduct impacting 12 investors, which occurred when Mr Nakhl was a representative of Australian Financial Services Limited – which is in liquidation – and sole director of SydFA Pty Ltd – which is deregistered.
The Court had found that Mr Nakhl advised clients to set up SMSFs, and invest their superannuation and other money in products in shares, managed funds and high interest accounts.
But “rather than investing the 12 investors’ funds in these products, Mr Nakhl used these funds ‘as he pleased’ and for his own purposes,” said ASIC.
“Mr Nakhl then lied to the investors, telling them that he had invested their funds in accordance with his advice and that their investments were performing well. Mr Nakhl also tried to cover up his wrongdoing by having these 12 investors sign documents that supposedly authorised Mr Nakhl to use the funds in the way he did.”
The 12 investors had approximately $6.7 million with Mr Nakhl, of which approximately $5.1 million was lost.
ASIC Commissioner Sean Hughes said: “Mr Nakhl deliberately misled his clients and used their savings as he pleased. Clients should be able to trust their financial advisers. In this case, Mr Nakhl dishonestly and deliberately breached his clients’ trust. ASIC welcomes the sentencing decision handed down today.”
In 2013 ASIC accepted an enforceable undertaking from Mr Nakhl, which permanently barred him from providing financial services.