Former senior financial adviser, James Hobson, has been convicted and sentenced in the Sydney District Court following an Australian Securities and Investments Commission (ASIC) investigation.
Hobson was sentenced on four counts to two years imprisonment but will avoid prison after entering into a two-year good-behaviour bond and, on a fifth count, a five-year good-behavior bond.
In sentencing Hobson, Judge Toner said he had imposed the longest period of supervision available under the legislation, adding that Hobson would be re-sentenced to full-time imprisonment should he commit any crime in that five-year period.
Hobson was a senior financial adviser employed by Binma, which operates the North Sydney firm Noall & Co, and which was an authorised representative of Professional Investment Services.
A call to the company in November confirmed that Hobson no longer works for Noall & Co.
The court found that between March 2008 and August 2008 Hobson misappropriated $307,000 and attempted to misappropriate $120,000 of client funds while working for Noall & Co.
In each instance, the funds were provided to him after the provision of advice to invest in international shares via a product called Skandia.
Anglo-South African financial-services company Old Mutual Group owned the Skandia platform at the time although its Australian operations were subsequently sold to IOOF Holdings in 2009.
It was alleged that Hobson did not invest these funds on behalf of his clients but instead used the money to fund a gambling addiction.
Following ASIC’s investigation he was charged with four counts of fraudulent misappropriation of a valuable security and one count of attempting to fraudulently misappropriate a valuable security under the Crimes Act (NSW).
Commissioner Greg Tanzer said ASIC pursued these cases to ensure gatekeepers working in the financial services industry, like Hobson, were made accountable for their actions.
“This type of behaviour undermines the trust and confidence which clients place in their financial advisers, and illustrates that advisers who commit fraud face criminal conviction,” he said.
Hobson has been banned permanently from providing financial services as a result of his conviction.
In related news, the New South Wales Supreme Court has made orders preventing Melinda Scott from carrying on a financial services business following an application by ASIC alleging the Sydney-based financial adviser has been involved in suspected fraud.
The injunction, obtained on Friday May 18, also prevents companies Roach Graham Scott and Roach Scott, of which Scott is a director, from carrying on a financial-services business.
Scott was an authorised representative of Millennium 3 Financial Services, a financial-advice business owned by the Australia and New Zealand Banking Group Limited (ANZ).
Her authorisation was revoked on May 15 and the matter returns to court on June 18.
