A former financial adviser has been given a lengthy jail term, after he was found to have spent millions of dollars of client funds “as he pleased” for his own purposes.
Gabriel Nakhl was sentenced to 10 years’ imprisonment by the District Court of New South Wales, which found him guilty of eight charges of dishonest conduct with investor funds.
In a public statement, ASIC said that Mr Nakhl had encouraged 12 investors to invest around $6.7 million in self-managed super funds (SMSFs), and used those, and other, funds to invest in a range of shares, managed funds and high-interest bank accounts.
However, ASIC said that those funds never made it to their intended destinations.
“Mr Nakhl deliberately misled his clients and used their savings as he pleased. Clients should be able to trust their financial advisers. In this case, Mr Nakhl dishonestly and deliberately breached his clients’ trust,” ASIC commissioner Sean Hughes said.
According to ASIC, Mr Nakhl lost around $5.1 million of the $6.7 million he was given to invest.
The regulator also said that Mr Nakhl lied to the investors by telling them that their monies had been invested as outlined and were performing well, and subsequently tried to cover his tracks by getting the investors to sign documents that “supposedly authorised Mr Nakhl to use the funds in the way he did”.
“ASIC welcomes the sentencing decision handed down today,” said ASIC commissioner Sean Hughes.
The conduct occurred while Mr Nakhl was working as a financial adviser for Australian Financial Services Limited, which is now in liquidation, and as the sole director of SydFA Pty Ltd, which has since been deregistered.
It marks an end to a lengthy investigation dating back to at least February 2013, when ASIC obtained orders to freeze Mr Nakhl’s assets. Those assets, frozen under interim orders, were by April 2013 worth around $7.7 million.
SydFA Pty Ltd was then placed into liquidation in September of that year, and Mr Nakhl was declared bankrupt.
In November 2013, Mr Nakhl was given a permanent ban from providing financial services, and is barred from managing a company until 2028.
Adam Zuchetti is the editor of My Business, and has steered the publication’s editorial direction since early 2016.
Ask the Experts: Does automation stack up financially?
By Christopher Overton
Opinion: How bad do things have to get?!
By Adam Zuchetti
Business lessons from the All Blacks
By Steve Stanley