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Financial adviser / money manager jailed for using clients' funds

BIScom Subsection: 
Author: 
Editorial Staff

Ross Andrew Hopkins of Killara, New South Wales, Australia, has been sentenced in the District Court of New South Wales to a maximum period of six years’ imprisonment, with a non-parole period of four years following his conviction on a guilty plea for using clients' funds for his own benefit.

Between 14 October 2016 and 8 October 2019, Hopkins was a financial adviser entrusted by his clients to manage their self-managed superannuation accounts. Hopkins had almost complete control of his clients’ superannuation which allowed him to transact on their accounts. Over a period of nearly three years, Hopkins misappropriated approximately AUD2.9 million of his clients’ funds without their knowledge.

Hopkins used his clients’ funds for his own benefit, such as holidays, rent, paying his own credit card debts and repaying personal loans.
Acting District Court Judge Wood QC found Hopkins was a ‘trusted financial adviser, managing funds pretending it was business-like, lawful and profitable. Each of the victims trusted and relied on him for his expertise. Some considered him a friend’.

That sounds very like the relationship many have with their private bankers and family offices.

His Honour also remarked that Hopkins’ behaviour was ‘deeply stupid’ but noted that ‘being stupid is no defence or mitigation’.

The Judge remarked that Hopkins’ conduct ‘involved positive steps to avoid detection and numerous misrepresentations and concealments’.

While the case is a fraud on his clients, it does not appear to be a Ponzi scheme.

An order for compensation is being sought.

Hopkins is also automatically disqualified from managing a corporation for five years.

QWL, which has held an Australian Financial Services Licence since 1 January 2004, provided QWL clients with financial advice including dealing in securities and advising on self-managed superannuation funds.

ASIC’s investigation into Hopkins and QWL commenced in 2019 in response to allegations that QWL had failed to assist the Australian Financial Complaints Authority in resolving complaints by clients.

On 4 November 2019, ASIC obtained orders and undertakings restraining Hopkins and QWL from dissipating assets or providing financial services to clients.
On 18 November 2019, ASIC obtained an extension of those orders until 25 May 2020, with a further extension obtained until 23 November 2020.

On 19 March 2021 (prior to the matter returning to court on 22 March 2021), ASIC, with Hopkins’ and QWL’s consent, obtained an additional extension of the financial services restraint orders against Hopkins and QWL until 27 September 2021, with a Directions Hearing listed for 20 September 2021 at the Supreme Court of New South Wales.

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