17 Jun, 2014
Australian watchdog permanently bans veteran investment adviser for “dishonesty”
Canberra, Monday 16 June 2014, Australian Securities Investment Commission – ASIC has permanently banned Mr Nigel Keith Flowers, 49, of Coolangatta, Queensland, from providing financial services and engaging in credit activities.
Mr Flowers was banned from providing financial services after ASIC found he had engaged in dishonest conduct and was not of good fame and character.
Mr Flowers was the director of Flowers Financial Group Pty Ltd (In Liquidation) and Flowers Financial Management Pty Ltd (In Liquidation) which specialised in providing financial advice to the medical profession. He operated in Sydney for over 25 years.
Mr Flowers engaged in a scheme to raise money to fund a proposed initial public offering (IPO) by Avior Australia Ltd (Avior). The scheme raised $1.475 million.
Mr Flowers raised funds from long-term clients of Flowers Financial Management. He established a trust account, ‘1Source Wholesale Investments Pty Ltd ITF Avior Pre-IPO Trust’ (trust account) to which he was the sole signatory, to collect his clients’ funds.
ASIC found that between February 2011 and March 2012, Mr Flowers improperly disbursed at least $720,331.70 from the trust account. Of these disbursements, at least $696,138.20 was paid to entities related to Mr Flowers.
Following cancellation of the IPO, Avior returned $30,000 to the trust account with the intention that it be returned to investors. ASIC found that Mr Flowers improperly disbursed over $29,000 of this $30,000 from the trust account, with at least $27,000 of these disbursements paid to entities related to Mr Flowers.
In addition to the banning from financial services, ASIC found that Mr Flowers is not a fit and proper person to engage in credit activities.
ASIC Commissioner, Mr Greg Tanzer, said that ASIC, and the community more broadly, expected financial advisers to act honestly and with integrity.
‘Dishonest conduct by financial advisers undermines confidence and trust in the financial services industry. ASIC regards these actions very seriously and will remove those who disregard the law’, Mr Tanzer said.
Mr Flowers has the right to appeal to the Administrative Appeals Tribunal for review of ASIC’s decision.
ASIC’s investigation is continuing.
Background
Flowers Financial Management held an Australian financial services licence from 24 November 2003 until it was cancelled by ASIC in April 2013 (refer: 13-082MR). Flowers Financial Management was also a credit representative of Vow Financial Pty Ltd between 14 December 2010 and 8 August 2012.
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