James Gibbs, a former Adelaide financial adviser, has been sentenced in the District Court of South Australia to 10 years imprisonment with a non-parole period of seven years.
In a public statement, ASIC said Mr Gibbs was convicted of theft and other dishonesty offences committed when he was director of James Gibbs Investments Pty Ltd (JGI) totalling approximately $4.88 million, following an ASIC investigation.
Mr Gibbs previously pleaded guilty to all charges, which he committed against his clients between 20 August 2009 and 30 July 2016.
At the time, Mr Gibbs was a financial adviser, trusted by his clients to operate their SMSF accounts as well as open new accounts.
“In some cases, Mr Gibbs was given almost complete control of his clients’ affairs which enabled him to conduct unauthorised transactions. Once he controlled the accounts, he went on to steal their funds,” ASIC said.
According to ASIC, Mr Gibbs used his clients’ funds for his own benefit, such as propping up his business, paying his own credit card debts, paying himself and staff a salary and for gambling.
Between 25 June 2012 and 30 July 2016, Mr Gibbs also created and used false documents, including bank documents and member statements in which he lied to his clients about the value of their investment portfolios to cover up his thefts.
ASIC commissioner Danielle Press said clients need to be able to trust their financial advisers, and in this case, Mr Gibbs breached that trust.
“ASIC’s investigation revealed that Mr Gibbs deliberately withheld information from clients to avoid detection. Financial advisers should always allow clients to access information about their own investments, and clients should be concerned if this is not occurring,” Ms Press said.
In delivering the sentence, Judge Boylan found that Mr Gibbs had built a relationship of trust with his clients, and then repaid their trust by systematically stealing their life savings and spending their money for his own purposes. Judge Boylan said Mr Gibbs stole from the easy targets who placed blind faith in him.
Judge Boylan also remarked that Mr Gibbs’ behaviour was “despicable” and “cruel” and his offending involved a “gross breach of trust”. His Honour found that the offending fell at the higher end of the scale in terms of seriousness.
Mr Gibbs is also automatically disqualified from managing a corporation for five years.
The matter was prosecuted by the Commonwealth Director of Public Prosecutions after an investigation and referral of a prosecution brief from ASIC.
He only got 10 years, the banks collectively stole a significant higher amount and they only got a slap on the wrist. Where is the logic in that.
Who the hell was the auditor???
Why does this behaviour keep recurring? It is a blight on our industry. We get obsessively over regulated because egg heads like these who will continue to operate their practices in this manner. Although must all complete the FASEA Ethical Behaviour and Professionalism subject, it is will never stop greedy operators from criminal activity.
So jailed for 7 years and banned from being a director for 5….. would have thought that would have been 5 after he was released…
A period of 7 years of stealing client funds and ASIC did not intervene during this period ?
If they had been active and doing their job correctly, then the victims of this individual may have been saved much of the losses they have now experienced.
Have these victims been repaid from Professional Indemnity Insurance cover??…No, because it was intentional and deliberate fraud, so how do these people recover from this ?
Do ASIC have to answer as to why this practice was not identified earlier ?
This sort of crap is enough to make you ill. Its no wonder public trust of us is so low. But where was the oversight ?