04-400 Seven years jail for former director of failed investment management company
Thursday 9 December 2004
Mr Jeffrey Lucy, Chairman of the Australian Securities and Investments Commission, today noted the sentencing of Mr Robert Geoffrey Walker, the former managing director of Financial Options Group Incorporated (FOGI), to seven years’ imprisonment, with a non-parole period of four-and-a-half years, after pleading guilty to charges brought by ASIC.
Mr Walker, of Mosman in New South Wales, was convicted in the Sydney District Court of 21 counts of deception under the Crimes Act 1900 (NSW).
The Court found that Mr Walker was involved in making false statements to investors about the returns that investors could expect to receive in relation to FOGI. It is estimated that the loss to investors associated with the charges against Mr Walker approximates $1.9 million. Overall, investors in FOGI lost approximately $11 million.
FOGI was a financial services business, which claimed to provide professional investment management in non-regulated foreign exchange bullion and base metal markets.
Potential investors were approached in various ways by representatives of FOGI to invest. The investors were predominantly based in Sydney, Byron Bay, the Gold Coast and Brisbane, many investing and losing their superannuation savings.
ASIC’s investigation found that Mr Walker, and a co-director of FOGI, Mr Robert Gary Johnstone, sent monthly report to investors, together with an account statement showing their cumulative balances after FOGI had supposedly produced a return on their principal investment.
ASIC alleged that the statements each month were false, and calculated to deceive investors. In fact, FOGI sustained significant losses from the outset in its trading. In addition, ASIC alleged that Mr Walker was using part of the funds invested by investors for his own use, including re-payment of personal credit cards, discharging a mortgage and in consultancy fees.
In sentencing Mr Walker, the Court noted the defendant’s vast experience in the financial sector, including a period as an executive director of the Macquarie Bank.
Mr Lucy said the jailing of Mr Walker indicated the serious nature of his crimes.
‘Mr Walker has deliberately sought to mislead investors and in doing so, compromised their financial positions. ASIC has acted to remove Mr Walker from the financial services industry and his punishment should serve as a warning to others offering advice’, Mr Lucy said.
The matter was prosecuted by the Commonwealth Director of Public Prosecutions.
Background
Mr Johnstone, of Queens Park in New South Wales, a former co-director of FOGI, was sentenced earlier this year to a maximum of four years imprisonment over 18 counts of deception under the Crimes Act (NSW), two counts of making false statements to investors under the Corporations Act 2001 and a further two counts of making false statements and providing false documents to ASIC as the finance director of FOGI.
On 18 February 2002, ASIC successfully applied to the Supreme Court of New South Wales to wind up FOGI and the Australia Fund Limited, of which FOGI was the major shareholder.
ASIC had previously obtained interim orders freezing the assets of Mr Walker and Mr Johnstone. Mr Walker and Mr Johnstone are now bankrupt and the interim orders have been lifted.
The Commonwealth Director of Public Prosecutions prosecuted these matters.
ASIC Website: Printed 03/12/2010
