Clients at one of Australia’s biggest stockbrokers firms are reeling after allegations surfaced that a former advisor secretly invested up to $3.5 million of their money into unauthorised and unrecommended products.
Kristofer Ridgway, 52, was sacked by Shaw and Partners in early March after information came to light, while management also alerted the Australian Securities and Investments Commission (ASIC) of the situation.
An email was reportedly sent out to some 27,000 clients about Ridgway’s dealings shortly afterwards, urging them to come forward if they were affected.
“Shaw and Partners is currently conducting a compliance review of clients holding certain unlisted securities. Please contact us … if you have received advice or assistance in investing in the following unlisted securities from Shaw and Partners,” the email read, according to coverage in The Sydney Morning Herald.
Get daily business news.
The latest stories, funding information, and expert advice. Free to sign up.
The companies listed were Marshall Islands company Trinus Impact Capital, the British Virgin Islands-based Steppes Alternative Asset Management and British Columbia company ASAF Critical Metals, the papers continue. None of these businesses were on Shaw’s approved product list.
Anonymous sources claimed Ridgeway had introduced more than 40 clients to David Sutton at McFaddens Securities — another financial services firm — which put them into at least three unlisted products.
When a disgruntled client approached head office with a complaint about a product, puzzled staff at Shaw and Partners began to dig into the situation and discovered investments had been made outside of its systems and procedures.
Shaw’s co-chief executive Earl Evans told SmartCompany it was an isolated incident.
“It’s disgraceful behaviour from this particular individual and we are working with the clients, the regulator and our lawyers in the aftermath,” Evans says.
“It’s not a reflection of who we are at Shaw and Partners and, to be frank, it’s not a reflection of the fantastic industry that I’ve worked in for 30 years.”
Ridgway’s Linkedin shows nearly 15 years working at Bell Potter Securities before joining Shaw and Partners in October 2013. He has been endorsed by several clients from his former position for skills including investments, finance and portfolio management.
Ridgway has also consulted in Papua New Guinea for Jamcorp Trading, according to his profile, which involves “improving their village wealth, health and well being”, he said.
Ridgway was so far declined to comment on the allegations, however his former wife Kerrilyn Ridgway told the SMH she’s “frightened and bewildered” after accusations Ridgway forged her signature to purchase shares in Steppes Alternative Plc, which he allegedly sold onto a client of Shaw and Partners.
ASIC confirmed that Ridgway and Sutton are on its radar.
“We can confirm that both Mr Ridgway and Mr Sutton are of interest to ASIC but we can’t comment further,” a spokesperson told SmartCompany.
This article was updated at 2pm on April 6, 2022.