ASIC has announced it permanently banned a former Brisbane financial adviser, who was recently sentenced to imprisonment on fraud charges.
In a statement, the corporate regulator said Sandeep Madhoji, a former authorised representative of Redwood Capital Group, was sentenced last month to 7.5 years imprisonment on 55 charges of fraud.
Following the prosecution, ASIC said it has permanently banned Mr Madhoji from providing financial services or engaging in credit activity.
According to the statement, between September 2010 and July 2012, Mr Madhoji had used clients’ funds to cover the loss made on other clients’ portfolios.
As a result, 14 clients collectively lost $3.3 million. These losses were incurred by Mr Madhoji using his recommended trading strategy, the statement said.
Further, Mr Madhoji made false statements to his former licensee and to clients to conceal the losses, ASIC said. He also made multiple unauthorised transfers and withdrawals from the accounts to hide the losses.
ASIC said Mr Madhoji committed these offences “to enhance his reputation to clients and create an illusion that he was a highly successful trader”.
“Dishonesty by any financial adviser will not be tolerated by ASIC," said ASIC deputy chairman, Peter Kell.
“We will investigate and prosecute instances of dishonesty to ensure that consumers have confidence in the financial system.”
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