Financial firms need to insist on greater visibility over the finances by implementing greater internal checks and balances to ensure that clients’ money is protected from wrongdoing and fraud, a high-profile Sydney businesswoman says.
Sharon Williams, founder of Taurus Marketing, has spoken out after her elderly mother fell victim to SentinelWealth financial adviser Gavin Fineff, who gambled away more than $3.3 million of his clients’ money.
Williams has this week published a heartfelt account of her mother’s experience in the hope that financial firms will work harder to stamp out malpractice.
The high-profile Sydney businesswoman explained that her 86-year-old mother was registered disabled, elderly and physically frail at the time of the fraud, making her an easy target.
She has argued the buck needs to stop with the executives of financial firms, who need to do more to ensure that their employees aren’t defrauding clients.
“From that day when my mother got the call from Sentinel Wealth, she would be able to stay in her home as she had breast cancer,” she wrote online.
But her mother had to relinquish her apartment and died 15 months later. Williams says theft was by mobile, text, email in work hours and home visits.
While she went on to financially support her mother, Williams is devastated that her mother’s final months were spent learning of the theft and dealing with police.
“There needs to be cross checks and balances so that bank balances are checked,” Williams tells Professional Planner.
“CEOs need to check that the money is actually in the bank. Management should be having team meetings to discuss clients and actually look at the numbers and see how investments are tracking, rather than just assuming.”
Fineff, who is 44 years of age, was jailed for nine years after pleading guilty in Sydney’s Downing Centre District Court last month to 12 counts of dishonestly obtaining financial advantage of deception, committed between October 2016 and March 2020.
The court heard victims were falsely told the funds would be put towards shares, but most of Fineff’s gambling was on horse racing, with bets placed online. Victims reportedly lost between $60,000 and $745,000, according to media reports.
ASIC permanently banned Fineff in June last year after he misused his position for personal gain and deprived clients and others of their funds.
The regulator found that he breached financial services laws by failing to act in the best interests of his clients and engaging in unlicensed conduct, and was not adequately trained or competent to provide financial services in the first place.
In a briefing document prepared by SentinelWealth, the firm told Treasury that CEO Justin Hooper was made aware of the fraudulent activity by Fineff in March 2020.
Investigations revealed that Fineff usually made a general approach to clients and non-clients using a template email in which he suggested a scheme in which the lender would be handsomely rewarded.
“We are the first to accept that unethical practices need to be stamped out and those responsible held to account,” the firm said in a statement.
“That said, this does not require that SentinelWealth be made effectively a guarantor to this objectionable transaction, which it was recognised has nothing to do with SentinelWealth, and which the evidence clearly shows the affected clients knew had nothing to do with SentinelWealth.”
The report also confirms that a risk audit by Marsh Risk Specialists concluded that Sentinel has in place more than 100 processing, preventative and detective controls to contain the 25 key risk events.
Meanwhile, SentinelWealth has locked horns with its insurer, Antares, after clients threatened to sue the company or have demanded compensation arising from losses related to Fineff.
Antares, which is part of QIC Global, is refusing to cover Sentinel’s costs, saying its policy did not cover Sentinel because the money was taken in his ‘personal capacity’ rather than as part of his work for the firm.
This article was edited on 3 May to clarify certain issues around Williams’ mother’s experience of the services provided by jailed former adviser Gavin Fineff.
Congratulations Sharon for speaking up. It is important that victims and their families have a voice as their has been plenty of talking done from the predators side. Condolences to you on your mums circumstances and her passing.
Sorry that this happened to this person – very sorry.
My understanding is that there needs to be insurance in place for this.
That Professional Indemnity or Employee Dishonesty cover is required to be in place and be effective.
It is a strtech by the insurer to say that the thefy occurred in a personal capacity when the person was clearly working as a Financial Adviser and got a person’s trust that way – and by making outlandish claims of returns!
“There needs to be cross checks and balances so that bank balances are checked,” – while I hear what Ms Williams is saying, a bank tends to make it impossible to find out what a bank account balance is, even if we are trying to inform Centrelink.
There is no way that it is acceptable that a client is made to suffer and be disadvantaged by suffering a loss.