Mr Ross Andrew Hopkins of Killara, NSW, 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 an ASIC investigation, Mr Hopkins, a former financial adviser, 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, Mr Hopkins was a financial adviser entrusted by his clients to manage their self-managed superannuation accounts. Mr Hopkins had almost complete control of his clients' superannuation which allowed him to transact on their accounts. Over a period of nearly three years, Mr Hopkins misappropriated approximately $2.9 million of his clients' funds without their knowledge.
Mr 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 Wood QC found Mr 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'.
His Honour also remarked that Mr 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.
Mr Hopkins is also automatically disqualified from managing a corporation for five years.
Mr Hopkins had previously pleaded guilty to all charges (20-287MR).
The matter was prosecuted by the Commonwealth Director of Public Prosecutions after an investigation and referral of a prosecution brief from ASIC.
Background
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 Mr Hopkins and QWL commenced in 2019 in response to allegations that QWL had failed to assist the Australian Financial Complaints Authority in resolving client complaints.
On 4 November 2019, ASIC obtained orders and undertakings restraining Mr Hopkins and QWL from dissipating assets or providing financial services to clients (19-300MR).
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 Mr Hopkins' and QWL's consent, obtained an additional extension of the financial services restraint orders against Mr Hopkins and QWL until 27 September 2021, with a Directions Hearing listed for 20 September 2021 at the Supreme Court of New South Wales.
