A solicitor and accountant who advised clients to invest in his own companies was barred from providing financial services for 10 years.
Christopher Malcolm Edwards, a solicitor, registered tax agent and registered SMSF auditor, received a 10-year ban from providing financial services and controlling an entity that carries on a financial services business, either alone or with others.
Edwards was also prohibited from performing any functions involved in carrying out a financial services business.
In addition to providing legal and accounting services, Edwards is a registered real estate agent and has offered real estate, mortgage brokering and property development services.
He operates out of Christopher M Edwards Solicitors and Accountants in Richmond, NSW.
The Australian Securities and Investments Commission (ASIC) said it had reason to believe Edwards was not a fit and proper person to provide financial services, or to perform functions as an officer and control an entity that carries on a financial services business.
Further, ASIC alleged Edwards does not have the “judgment, skill or character” to participate in the Australian financial services industry and was likely to contravene a financial services law.
Following its review of a sample of clients who received financial product advice from Edwards over a four-year period, ASIC said it found Edwards did so “with sufficient system, repetition and continuity” despite not holding an Australian Financial Services (AFS) license or authorisation from an AFS licensee.
In its statement, the regulator claimed Edwards set up “deeds of arrangement” between clients and companies he controlled.
The clients were allegedly providing the company with money for three or four years and were promised that at the end, they would receive principal and a fixed-rate interest. In some cases, the interest was on a quarterly basis.
ASIC also found Edwards’ conduct in approaching accounting and legal clients and making recommendations to invest in companies he controlled “was particularly serious”.
In particular, it was alleged that Edwards set up self-managed superannuation funds (SMSFs) and arranged for clients to roll over funds into the SMSFs and/or invest the funds in debentures issued by companies he controlled.
“ASIC is also concerned about an inherent and significant conflict of interest given Edwards’ obligations to his client as a solicitor and/or accountant on the one hand, and his personal interest in securing funding for his companies for property developments on the other,” ASIC said.
Since July 2016, accountants have been required to be covered by an AFS license to give advice about acquiring or disposing of an interest in an SMSF.
ASIC found Edwards had knowledge and use of the accountants’ exemption and the need to have authorisation to provide financial product advice,
It was also alleged that Edwards was aware of what constituted financial product advice and knew he was not entitled to give it.
ASIC’s investigation is ongoing.
Naomi Neilson is a senior journalist with a focus on court reporting for Lawyers Weekly.
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