The statement said the court had found Nakhl advised clients to set up self-managed superannuation funds and to invest their superannuation and other funds in products such as shares, managed funds and high interest rate bank accounts.
“Rather than investing the 12 investors’ funds in these products, Mr Nakhl used these funds ‘as he pleased’ and for his own purposes,” the statement said.
“Nakhl then lied to the investors, telling them that he had invested their funds in accordance with his advice and that their investments were performing well.”
ASIC’s statement said Nakhl also tried to cover up his wrongdoing by having these 12 investors sign documents that supposedly authorised Nakhl to use the funds in the way he did.
“Mr Nakhl deliberately misled his clients and used their savings as he pleased,” ASIC commissioner Sean Hughes said.
“Clients should be able to trust their financial advisers. In this case, Mr Nakhl dishonestly and deliberately breached his clients’ trust.”
Clients should be able to trust their financial advisers. In this case, Mr Nakhl dishonestly and deliberately breached his clients’ trust.
ASIC’s Sean Hughes
ASIC in 2013 banned Nakhl, of Illawong in southern Sydney, for life from providing financial services and obtained an undertaking from him that he not manage a company for 15 years.
At that time, ASIC issued a public statement saying Nakhl had spent client money “on his private sports car and motorbike hire business and himself”.
ASIC froze Nakhl’s assets in 2013, at which stage the assets were valued at $7.7 million. He was subsequently declared bankrupt and SydFA was placed in liquidation.
Victims of Nakhl have sought to pursue him and associated entities through the civil courts to try to recoup their losses.
As part of one of those actions, two of his former clients, a husband and wife, told the NSW Supreme Court in 2014 that they had entrusted Nakhl with their retirement savings of about $2 million after their accountant of 20 years had died.
They told the court they wanted the money to be “invested conservatively”. In early February of 2013, one of the victims claimed he told Nakhl he wanted to retire as a tradesman at the end of the year because his “back is gone” and was assured his money was safe.
By the end of the month, ASIC had frozen all of Nakhl’s funds and was then told the money had been used by Nakhl for other purposes.
Mathew Dunckley is business editor for The Sydney Morning Herald and The Age. Based in our Melbourne newsroom, Mathew has almost 20 years experience as a journalist and editor.