A New South Wales Supreme Court judge has convicted Astarra Asset Management's (AAM) former director Shawn Richard of dishonest conduct while running a financial services business and sent him to jail.
Justice Peter Garling said on Friday that a term of imprisonment was the only appropriate punishment for Richard
Richard had last year pleaded guilty to two charges of dishonest conduct while running AAM and admitted to a third charge of making false statements in relation to financial products following an ASIC investigation.
The charges each carry a maximum penalty of five years' imprisonment or a $220,000 fine, or both.
Richard's sentencing is scheduled for 12 August.
"Mr Richard, in respect of the two counts of the indictment to which you pleaded guilty, I convict you on both," Garling said.
"However it is proper that I indicate to you that I will be imposing a sentencing of imprisonment."
"I wish however to proceed carefully given the evidence that is presented before me and the submissions on behalf of the crown and on your behalf."
It is alleged Richard dishonestly received undisclosed payments in his role as investment manager of the Astarra Strategic Fund (ASF) and Astarra Superannuation Plan (ASP).
He also faced allegations that he knowingly made materially misleading statements about the value of investments made by the ASF.
"ASIC alleged, among other things, that Richard was involved in causing the ASF and ASP to place investor monies in overseas hedge funds, in circumstances where Mr Richard would personally receive a significant portion of the monies for his own benefit and for the benefit of his company, AAM," ASIC said in December.
"The monies Richard placed in the overseas hedge funds had been raised by the responsible entity of ASF, Trio Capital Limited (Trio)."
"ASIC alleged that Richard and AAM received in excess of $6.4 million in undisclosed payments."
ASIC also alleged that Richard made materially misleading statements about the value of ASF's investments in the overseas hedge funds, knowing that these statements were included in valuation statements provided to Trio and were likely to induce Trio to seek further investments in the hedge funds.
