Friday 7th September 2012
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Albany-based financial adviser Evan Cherry pleaded guilty to four charges out of seven levelled against him in a $5 million fraud in the North Shore District Court today.
Cherry admitted four charges under the Crimes Act relating to the misappropriation of investor funds and false statements in investor reports and has been remanded in custody until sentencing on Dec. 11, the Serious Fraud Office said in a statement.
The fraud took place between January 2001 and February 2007 when funds were invested contrary to investors' instructions, the bulk of whom had followed him when he left a large firm.
"The high level of trust associated with personal relationships reduces any questioning by the investor when presented with a change in the underlying nature of the investment," chief executive Adam Feeley said. "It can be a dangerous arrangement that clouds judgement."
Cherry's ISL group of companies received some $9 million from about 175 investors, the SFO said.
The SFO began its investigation in June last year after the Financial Markets Authority's predecessor, the Securities Commission, referred the case.
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