Former adviser slapped with three-year prison term

A former adviser based in NSW has been sentenced to three years imprisonment for misappropriation of client funds as well as false and misleading statements to obtain money.

The prison sentence of accountant and former financial adviser Nicholas James Ellis of Valentine, NSW, is to be served by way of intensive corrections order (ICO), ASIC said in a statement.

In delivering the sentence, Judge Williams remarked that Ellis “provided information to investors that was untrue and caused those investors to act on that information”, and that, “had the true picture been disclosed, the investors may have been less forthcoming”.

As part of the ICO, Ellis will serve 12 months by way of home detention, subject to a further suitability assessment, and undertake 700 hours of community service.

Ellis pleaded guilty to the two charges on 4 August 2017. ASIC’s investigation found Ellis sent 10 letters and one email to a number of his clients for the purpose of raising investment funds to purchase a hotel in Tura, NSW, through his company, Tura Pty Limited.

The letters and email contained false and misleading statements in relation to the purchase of the hotel, ASIC said.

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Ellis admitted to fraudulently misappropriating approximately $562,000 of client funds received by Tura Pty Limited, of which some of the funds were used to buy a house in Manly, NSW.

“Mr Ellis was a trusted financial adviser and accountant, who misled his clients and misused their funds for the benefit of his own business. Accountants and financial advisers are in a position of trust,” said ASIC commissioner Danielle Press.

“As demonstrated in this case, ASIC is prepared to take criminal action where trusted advisers misappropriate clients’ money.”

The matter will be back in court on 17 October 2019 for the purposes of determining Ellis’ suitability for home detention.

ASIC banned Ellis from providing financial services in 2013 for a period of six years.

Former adviser slapped with three-year prison term
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Adrian Flores

Adrian Flores

Adrian Flores is a features editor at Momentum Media, focusing mainly on banking, wealth management and financial services. He has also written for Public Accountant, Accountants Daily and The CEO Magazine.

You can contact him on [email protected].

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