Former Sydney-based financial adviser Ross Andrew Hopkins was sentenced in the District Court of New South Wales to a maximum six years' imprisonment, with a non-parole period of four years, the Australian Securities and Investments Commission (ASIC) said in statement on 25 May.
Following an ASIC investigation, Hopkins, of Killara, New South Wales, was convicted of 15 dishonesty offences under the Corporations Act, committed when he was the sole director of QWL Pty Ltd (QWL).
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 A$2.9m ($2.26m) 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.
ASIC Commissioner Danielle Press said: "Mr Hopkins lied to his clients, and the Court's decision demonstrates the seriousness of this conduct. Financial advisers must be open and honest with their clients and if they aren't, they face serious consequences."
‘Financial advisers should always allow clients to have direct access to information about their own investments. If this is not occurring, clients should contact ASIC with their concerns.'
In delivering the sentence, acting district court judge Woods QC found Hopkins was a "trusted financial advisor, 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".
Woods also said that Hopkins' behaviour was "deeply stupid" but noted that "being stupid is no defence or mitigation". It was also observed that Hopkins' conduct "involved positive steps to avoid detection and numerous misrepresentations and concealments".
Reparation orders were sought with respect to the losses suffered and judgment on this aspect was reserved until 7 July 2021.
Hopkins was also automatically disqualified from managing a corporation for five years.
Mr Hopkins had previously pleaded guilty to all charges.