Financial advisor permanently banned by ASIC after using client’s share trading account

A New South Wales financial advisor has been permanently banned by the Australian Securities and Investments Commission from providing financial services, after he was convicted of fraud last year.

Joshua Doyle, of Bradbury, last year received a suspended 18-month jail sentence for fraud, on the condition he enters into a good behaviour bond.

Doyle had been employed with Gateway Financial Advisors and was an authorised representative of Titanium Planners when he stole money from one of his clients by using the client’s share trading account.

Between September 2010 and September 2011, Doyle engaged in unauthorised share trading using his client’s Macquarie Bank share trading account. Doyle sold down the client’s shares without her knowledge, transferred the proceeds to the client’s cash management account and then transferred these funds to his own account.

Through this process, Doyle obtained approximately $173,000.

In late 2011, Doyle was charged by NSW police for a number of fraud offences and he pleaded guilty to dishonestly obtaining financial advantage.

This year, ASIC has banned 12 financial advisors, seven of whom have been banned permanently.

Warfield and Associates chief executive Brett Warfield told SmartCompany in these cases, dodgy financial advisors often target the most vulnerable.

“Unfortunately, you’ll often find you’ll be dealing with people who aren’t financially savvy or they’re elderly and the financial advisor takes advantage of that.

“Some people don’t have the financial nous to be checking their accounts regularly, or they’re elderly and can’t manage their accounts themselves,” he says.

Research conducted by Warfield and Associates, published in 2011, of 500 Australian fraud cases revealed there is almost a 50-50 chance of going to prison for frauds involving $50,000 or less. When the amount is over $50,000 the likelihood increases, and for amounts over $100,000 the probability of a prison sentence, suspended or otherwise, was 94%.

“For a $173,000 fraud, an 18-month suspended sentence was a good result for Doyle.

“The higher the amount, the more likely it is you’ll spend time in jail,” Warfield says.

Warfield says it’s crucial for financial advisory businesses to monitor the activities of their financial advisors to ensure fraudulent activity is not taking place.

“Financial organisations have multiple planners and they deal with a lot of clients, so there are many people who could be affected. Businesses need to have compliance measures in place and sufficient resources allocated to compliance,” he says.

There have been a number of fraud cases in Australian courts this year, and earlier this month two Melbourne businesses also revealed the possibility of employee fraud within the organisation.

Dual Australia, the Australian arm of the international insurance firm Dual International, revealed $17 million had been allegedly misappropriated.

In June, a former bookkeeper of logistics group TZ Limited was convicted of fraud after he made false entries into TZ Limited accounts and made payments to himself totalling $130,000.

 

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