Investors Finance Director’s $440K Splurge in Sham Hedge Fund

Russell
Sandiford, former director of investment firm Reiwa-Capital, has pleaded guilty
to two counts of dishonest conduct related to mishandling client investments. From
the nearly $500,000 collected, the fake “hedge fund” creator paid out
only 1% of the total amount to clients. The Australian Securities and
Investments Commission (ASIC) brought the charges.

Between
January 2020 and June 2022, Mr. Sandiford obtained over $440,000 from 74
clients under the pretense of investing their money in trading activities.
However, the funds were used for Sandiford’s expenses unrelated to trading.

The
investments were marketed as a “hedge fund” that would trade foreign
exchange and commodities, and an income fund that would pool client money for
trading. Clients were contacted using email lists Sandiford had from his
previous roles at brokerage firms.

In total,
only $6,316 out of the $440,909 collected was returned to investors. At the
time, Sandiford did not hold the proper licenses to provide financial advice or
services.

Sandiford
entered his guilty plea on February 13, 2024 at the Downing Centre Local Court.
The matter will now move to the Sydney District Court on March 15 where a
sentencing date will be determined.

“Engaging in dishonest conduct in relation to a financial product or financial service in the course of carrying on a financial services business is an offense contrary to section 1041G of the Corporations Act with section 1311,” ASIC explained.

The
Commonwealth Director of Public Prosecutions is prosecuting the case on
referral from ASIC . Sandiford faces up to 15 years in prison and fines of over
$900,000, or three times the total investor funds obtained, whichever is
greater.

AISC Intensifies Crackdown
on Fraudsters

The
Australian Securities and Investments Commission (ASIC) is stepping up its
efforts to combat fraud in the financial industry.

A striking
illustration of fraudsters’ cunning tactics is the case Finance Magnates
reported at the end of January. Despite a decade-long ban from participating in
the financial industry, an Australian named Joshua David Fuoco, a former
financial services director from Melbourne, managed to establish as many as
five different investment firms during his prohibition period. He is now facing
contempt of court proceedings initiated by ASIC.

In
November, to address such fraudulent activities, ASIC announced the
implementation of its new “scam website takedown capability.” Since its
introduction in July 2023, this initiative has significantly disrupted the
operations of over 2,500 investment scam and phishing websites. To date, the
regulator has successfully taken down 2,100 websites, with an additional 400 currently
being dismantled.

Following
up on this, ASIC has further intensified its crackdown on illegal financial
services platforms and impostors by releasing its first “investor alert list.”
This list initially identified 52 unlicensed entities and 25 websites
impersonating legitimate entities, marking a significant step in ASIC’s ongoing
battle against financial fraud

Russell
Sandiford, former director of investment firm Reiwa-Capital, has pleaded guilty
to two counts of dishonest conduct related to mishandling client investments. From
the nearly $500,000 collected, the fake “hedge fund” creator paid out
only 1% of the total amount to clients. The Australian Securities and
Investments Commission (ASIC) brought the charges.

Between
January 2020 and June 2022, Mr. Sandiford obtained over $440,000 from 74
clients under the pretense of investing their money in trading activities.
However, the funds were used for Sandiford’s expenses unrelated to trading.

The
investments were marketed as a “hedge fund” that would trade foreign
exchange and commodities, and an income fund that would pool client money for
trading. Clients were contacted using email lists Sandiford had from his
previous roles at brokerage firms.

In total,
only $6,316 out of the $440,909 collected was returned to investors. At the
time, Sandiford did not hold the proper licenses to provide financial advice or
services.

Sandiford
entered his guilty plea on February 13, 2024 at the Downing Centre Local Court.
The matter will now move to the Sydney District Court on March 15 where a
sentencing date will be determined.

“Engaging in dishonest conduct in relation to a financial product or financial service in the course of carrying on a financial services business is an offense contrary to section 1041G of the Corporations Act with section 1311,” ASIC explained.

The
Commonwealth Director of Public Prosecutions is prosecuting the case on
referral from ASIC . Sandiford faces up to 15 years in prison and fines of over
$900,000, or three times the total investor funds obtained, whichever is
greater.

AISC Intensifies Crackdown
on Fraudsters

The
Australian Securities and Investments Commission (ASIC) is stepping up its
efforts to combat fraud in the financial industry.

A striking
illustration of fraudsters’ cunning tactics is the case Finance Magnates
reported at the end of January. Despite a decade-long ban from participating in
the financial industry, an Australian named Joshua David Fuoco, a former
financial services director from Melbourne, managed to establish as many as
five different investment firms during his prohibition period. He is now facing
contempt of court proceedings initiated by ASIC.

In
November, to address such fraudulent activities, ASIC announced the
implementation of its new “scam website takedown capability.” Since its
introduction in July 2023, this initiative has significantly disrupted the
operations of over 2,500 investment scam and phishing websites. To date, the
regulator has successfully taken down 2,100 websites, with an additional 400 currently
being dismantled.

Following
up on this, ASIC has further intensified its crackdown on illegal financial
services platforms and impostors by releasing its first “investor alert list.”
This list initially identified 52 unlicensed entities and 25 websites
impersonating legitimate entities, marking a significant step in ASIC’s ongoing
battle against financial fraud


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