Former Berndale director jailed for $700k in misused funds

Former Berndale Capital Securities director Stavro D'Amore has been sentenced to almost four years' imprisonment after admitting to dishonestly misusing nearly $700,000 of company funds and authorising false statements to ASIC.

The Federal Court sentence D'Amore to a total effective sentence of three years and 10 months, with a non-parole period of 23 months,for offences committed between 2017 and 2018. He was taken into immediate custody on July 23.

The court heard D'Amore improperly transferred $681,496.98 in Berndale funds, knowing the money was primarily derived from retail client deposits. More than $8.9 million remains owed to former Berndale clients following the firm's collapse in December 2018.

D'Amore also authorised false and misleading statements in documents lodged with ASIC regarding overseas bank accounts that purportedly held Berndale funds.

Berndale was required under its Australian financial services licence to maintain minimum net tangible assets and lodge audited financial reports. However, the overseas accounts and funds referenced in those documents either did not exist or were martially inaccurate.

ASIC chair Sarah Court said the former director had abused his position to benefit personally while concealing the firm's true financial position.

"D'Amore seriously abused his position as director to enrich himself and he authorised false statements to ASIC to hide the true financial position of the company he had taken money from at the expense of Berndale investors," Court said.

"The sentence demonstrates the egregiousness of his misconduct."

She added conduct of this nature "puts retail investors at serious risk and undermines trust in Australia's financial system," adding ASIC would continue pursuing those responsibilities for similar misconduct.

In sentencing, Justice Abraham said offences of this kind damaged confidence in Australia's financial markets and corporate regulatory framework.

"Victims of these types of crimes are not confined to those who directly suffered through loss of their funds, but extend to the investing public at large," Abraham said.

D'Amore pleaded guilty in May to three rolled-up Corporations Act charges covering dishonest use of his position as director, dishonest conduct in a financial services business and authorising false statements to ASIC.