The former director of Strategic Alternative Investments (SAI) has pleaded guilty to six charges of dishonest and deceptive conduct.
Krishnan Rasaratnam pleaded guilty in Sydney's Downing Centre District Court late last month to one count of using a false instrument and five counts of dishonest conduct in relation to providing a financial service, ASIC said in a statement.
A further charge of using a false instrument, three charges of dishonest conduct and two charges of making false statements to ASIC would be taken into account in Rasaratnam's sentencing, the corporate watchdog said.
SAI was the holder of an Australian financial services licence and provided product advice and dealt in derivative and foreign exchange contracts. ASIC cancelled SAI's licence on 1 December 2006.
Between February 2006 and January 2008, Rasaratnam raised funds from investors by making false and misleading claims that SAI investments were low risk, carried a high return and in some cases were capital guaranteed by a major investment bank, ASIC said.
He misappropriated the funds by diverting them to his personal trading account. He was not licensed as a currency trader.
As a result of the purported investment activity by SAI, investors incurred losses of more than $12 million.
Rasaratnam was arrested and charged in September 2009.
The maximum penalties for the offences are 10 years' imprisonment for using a false instrument, five years' imprisonment for dishonest conduct in relation to providing a financial service and five years' imprisonment for making false and misleading statements to ASIC.
Rasaratnam will be sentenced on 29 March next year.
