Two position papers prepared as part of legal proceedings against Ms Caddick on behalf of a group of 15 investors reveal that at least $20.84 million in funds, and likely “substantially more”, is tied up in the alleged fraud perpetrated by Ms Caddick, who had cultivated long-standing relationships of trust with her investors in Sydney’s eastern suburbs.
“In almost all cases, the relationship with Melissa Caddick or her family member spanned a period of two or more decades,” the paper prepared by Sydney firm Bridges Lawyers states.
“In a few cases the trusted persons had even been former work colleagues of Melissa Caddick over a period also spanning many decades.
“They had personally witnessed Melissa Caddick’s professional success as a financial planner as long ago as the early 2000s, including Melissa Caddick’s role in being voted as part of ‘Australia’s best planning practice’.”
It’s understood Ms Caddick worked for Wise Financial Services during the early 2000s, with the business winning an ifa award for best practice in 2003 when the publication was under previous ownership.
The paper references ASIC evidence that Ms Caddick had 42 “known or potential” investors over just an 18-month period from January 2018 to June 2020. Just under $675,000 remains in cash accounts held by Ms Caddick and her now collapsed company Maliver, according to affidavits made as part of the proceedings.
The holder of the AFSL used by Ms Caddick – understood to be Sydney practice Bloom Advisory Group – had a previous working association with her, and Ms Caddick had even suggested there was a referral arrangement in place between the two, the investor group claimed.
“While the AFSL holder denies giving permission for Melissa Caddick or Maliver Pty Ltd to use their AFSL, the investors understand that they maintained a current working association through the referral of clients needing insurance broking services,” the documents state.
Ms Caddick also provided investors with elaborately forged physical and digital documentation of their implied shareholdings within CBA’s CommSec platform, listing popular stocks such as Afterpay and JB Hi-Fi among the holdings.
These were backed up by detailed monthly reports, buy and sell contract notes, dividend statements, share statements and share certificates.
Investors had also lodged tax returns detailing these holdings “for many years”, and several had SMSFs that were independently audited “in some cases over a five-year period” without any red flags being raised, the paper states.
The news comes as liquidators are due to provide a report to the Federal Court around the extent of Ms Caddick’s debts to investors by 15 February.
The group of investors represented by Bridges are calling for her two eastern suburbs properties, worth an estimated $4.8 million after debts, to be sold in order to maximise the funds returned to Ms Caddick’s former clients.
Ms Caddick has not been seen since leaving her home in early November 2020, but police believe she is still in Australia.
Dixon Advisory used to win the AFR’ s SMSF administrator of the year most years. Having said that, they also used to break the world record for advertising expenditure with the AFR every year. Definitely a correlation there.
Exactly what Bernie Madoff did to his customers.
No amount of education and regulation will stop a dedicated crook. Greed of the individual also assists in people getting away with it, inflated returns sound too good to be true, they probably are.
How did she do it – simple, don’t register with ASIC, just like all of the money coaches.
Interesting question is who audited the Smsf accounts ?
Yes, and don’t steal any more than $20M of client’s money. That seems to be the threshold at which ASIC takes an interest in protecting consumers from unlicensed advice.
This just goes to prove ASIC and FASEAs point. If she had of done the ethics exam she wouldn’t have done this.
Made me think – has James Shipton completed and passed the FASEA exam? Has anyone at ASIC completed and passed the FASEA exam?
Don’t be silly. Their too busy organising tickets and boxes at the Aust. Open.
or taking tax advice and flicking it through to Joe Public with the FBT of course
Record for breaking every FASEA standard possible.
No ASIC levy, no FASEA exam cost, no ASFL to pay, no PI costs, no Annual Licensee Audits, no PI costs, no Software, no further education requirements, no Look Back Audits, no FPA membership fee/tax, no TPB fees – have I missed something? Yes I have, no FSG, TOA, SOA, Opt-in, FDS.
Perhaps if ASIC encouraged people to seek/use Licensed only……… never happens.
Perhaps that is how and why?
Instead ASIC does the opposite. They publicly vilify licensed advisers to discourage consumers from using them. They drown licensed advisers in regulatory complexity to make it more difficult and more expensive for consumers to use them. Yet they do nothing to stop harmful unlicensed advice. (Until the unlicensed provider steals $20M).
Spot on!
Time ASIC stepped up with a TV and ad campaign on how to do due diligence on an adviser, starting with FAR. If they aren’t on it, “… please explain”
Exactly. ASIC should also be prosecuting media outlets that deliberately mislead the public by stating someone is a financial adviser when they are not. ABC and Fairfax are both guilty of repeated violations in this regard.
Interestingly, 60 minutes aired a long story on Caddick last week, and not once did they refer to her as a financial adviser. Well done Channel Nine. Yet Fairfax (now owned by Nine) is still running stories this week which fraudulently refer to her as a financial adviser.
Many people suggested Fairfax’s standards would decline following the Nine acquisition, but sadly Fairfax had already crawled into the gutter long before that. Fairfax’s current appalling standards make Nine look like a bastion of journalistic integrity. Nine needs to stop the rot at Fairfax. Sacking hypocritical trash peddlers Kate McClymont and Adele Ferguson would be a good start.
The 60 minutes episode also didn’t make it clear that ‘Caddick’ wasn’t a Financial Adviser, but rather a high quality fraud. This point should have been highlighted. Must not have tested as well in the ratings surveys.
The Daily Telegraph ran a full page story on Caddick this weekend. It had no mention, or even suggestion, that she was a financial adviser. It seems that even the Daily Telegraph has higher journalistic standards than Fairfax these days.
Don’t be ridiculous. They are too busy tackling the big issues such as persecuting honest advisers who recommend mainstream investments, have happy clients and provide regular service but may not have kept the records ASIC never asked for, but now demands retrospectively based on extreme, draconian interpretations of the Corps Act. Yep. our regulator has their priorities perfectly aligned with community expectations.
What a shame for the whole financial planning community that is working so hard to earn and retain the trust of the public. Just goes to show all the FASEA standards in the universe cannot stop a determined criminal.
Of course even more of a shame for her family and friends that she has stolen from. Hope they find her and lock her up.
I was not aware that she was a Financial Planner. Perhaps the press if saying this but I believe they are incorrect. If so, this is a great story for Licensed Financial Advise – a bad story for ASIC to answer and face the victims. Perhaps the money given to CHOICE could have been better used?
Not wanting to defend FASEA but… their standards only apply to licensed advisers. As does Best Interests Duty. As does ASIC’s retrospective “interpretations” of the Corporations Act.
Unlicensed providers are not subject to any standards or controls. They can do whatever they like up to the point of stealing $20M of clients money. Only once they reach that point does ASIC bother to take any interest in protecting consumers.
There would be tens of thousands of unlicensed advice providers out there that ASIC completely ignores. They are probably not quite as bad as Caddick, but they are far worse than the licensed advisers ASIC chooses to persecute instead. Consumers have been betrayed by ASIC.
Seems to be an accurate summary of the current situation.
The cockroach is in hiding, and somebody close to her knows how she got away if not precisely where. The properties should now be possessed by ASIC under the existing orders they have obtained and sold immediately. The regulator and courts need to move much more swiftly in dealing with these fraudsters.
“this was not a Sydney business woman” but a fraudster. Why do you refer to her in such a way?
It would be interesting to know what led to her becoming unlicensed. Was she ever actually licensed at Wise Financial Services, or did she just “work there”?
She’s not listed on ASIC’s Financial Adviser Register at all, not even as “Ceased” like Sam Henderson is.
“interesting to know what led to her becoming unlicensed”. For reference, we are all born this way.
Originally yes, but the inference of the article is that she was licensed at some point, and now she’s not.
A more interesting question would be, why on earth would she ever of considered becoming licensed?
So while ASIC was forcing honest, hard-working advisers to refund fees to happy clients with mainstream investments, who were receiving service (just not in the format ASIC retrospectively demanded), this alleged con-woman was allegedly fleecing consumers for years. Another example of ASIC’s stupidity and depraved priorities.
This is hilarious!
Seriously, I can not stop laughing at this story, especially with parts like “independently audited in some cases over a five-year period without any red flags being raised”.
This so reminds me of Storm Financial and since then our industry, has been put through the ringer by short sighter so called professionals who are not even in the industry or even spent any time in the industry, and thought they knew how to fix things, but didn’t. These idiots have now caused many, many excellent planners and good people to leave this industry.
This exodus of good talent and the more and more educational demands and control, won’t ever fix this problem 100%, as some people are smarter than the system, seeing it as a challenge to beat the system, the rules etc, to win. Its human nature – you can’t stop this..
I feel sorry for the people in our industry, that have been there for 20, 30 or year longer years, that have had their lives destroy, for what? This type of behaviour will continue…
It just shows how easy it is for these type of people to establish trust and fraud – the question is what has ASIC learnt and what education/compliance has ASIC put in place to discover this type of issue which was one of the very reasons ASIC was set up in 1990!!!! – It appears ASIC is reactive rather than proactive – ASIC view is public interest on individual complaints – which means is is too late!!!
This is clearly a blatant fraud by Ms Caddick and she should be punished for this to the full extent of the law.
However, there is something I can’t quite wrap my head around, and that is why the investors – particularly those who entrusted her with a large amount of money – didn’t request their own login to CommSec (and if declined by Ms Caddick, called CommSec themselves to enquire on their account). They would have quickly seen that there was something amiss and could have taken action. Do people have such little interest in their own wellbeing – particularly when it comes to financial matters – that they don’t undertake their own checks and balances?
Yes, that is how it is. No amount of information fixes that.
it also seems to indicate that her clients were transferring funds directly to an account controlled by her rather than an account at Commsec, in the name of the client. I also don’t understand how the tax agents did not pick up that there was a discrepancy between what she was reporting as income, compared to what the ATO portal would have detailed as income from these supposed share holdings, which was obviously 0! So many checks and balances should have picked this up.
ASIC and FASEA were too busy scheming about how they could make it impossible for honest, hard-working, licensed advisers to operate, and forgot their absolute no. 1 priority should be creating a framework which catches these shonks early and giving the community the appropriate mechanisms to report and alert authorities. There were clearly red flags from day one. Very sad to see these people lose their money.
She pulled it off because ASIC was not looking. Seriously.
Perfect compliance record.