ASIC takes legal action against NSW financial adviser

ASIC has commenced proceedings in the Federal Court of Australia against NSW financial adviser Graeme Walter Miller for submitting illegitimate life insurance applications among other offences.

Following an investigation, the regulator alleges that Miller:

  • recommended that clients of CFS Private Wealth establish self-managed superannuation funds (SMSF) and use their SMSF funds to invest in CFS Corporation, of which Miller was a director;
  • used investor funds for personal use and to repay other investors in CFS Corporation;
  • failed to keep proper records of client investments in CFS Corporation;
  • continued to operate the bank account of CFS Corporation after it was deregistered;
    • submitted illegitimate life insurance applications to insurers in order to receive commissions, in circumstances where the insureds had not instructed him to submit applications on their behalf and were not aware that he had done so; and
    • may be continuing to provide financial services and/or raise funds from clients.

The following three companies associated with him are also part of the proceedings:

  • CFS Private Wealth Pty Ltd, an Australian financial services licensee (CFS Private Wealth);
  • Combined Financial Solutions Pty Ltd; and
  • BDM Asia Pacific Pty Ltd (formerly known as CFS Corporation Pty Ltd), which is deregistered (CFS Corporation).

It is also alleged that the respondents appear to have insufficient assets to repay investors in CFS Corporation and that CFS Private Wealth has failed to lodge its financial accounts for the 2016 and 2017 financial years.

ASIC is seeking orders to:

  • restrain Miller from providing financial services;
  • prevent the respondents from dealing with assets or investor funds;
  • wind up the companies and appoint a liquidator; and
  • disqualify Miller from managing corporations.

The matter will be heard in the Federal Court in Brisbane on 10 May 2018 and ASIC’s investigation is continuing.