The Australian Securities and Investments Commission has permanently banned a Brisbane-based advisor from providing financial services after discovering he engaged in “misleading and deceptive” conduct.
George Karakatsanis, of Yeronga, Queensland, recommended his clients invest in unsecured, fixed-interest notes in Protect Ensure, a company for which he was an authorised representative between 2012 and 2014.
ASIC found that Karakatsanis made false statements about features of financial products that were enticing to clients and deliberately misled them so they did not understand their basic features, and then recommended they invest in the products.
Additionally, he failed to properly disclose that investor funds were being pumped into Protect Ensure and, therefore, created a direct conflict of interest, Australia's financial watchdog ruled.
Karakatsanis also ignored his clients' circumstances, objectives, financial situations and needs when suggesting they invest in Protect Ensure and failed to provide official statements of advice, ASIC said.
Subsequently, ASIC concluded that clients' funds were improperly used to pay for Protect Ensure's business-related expenses due to Karakatsanis' conduct.
As a result of his actions, some investors lost their invested funds entirely.
“Mr Karakatsanis's conduct falls far short of the high standards expected of those in the financial services industry,” said ASIC's deputy chairman, Peter Kell. “ASIC will continue to protect consumers from advisors who engage in misleading conduct and place their interests above those of their client.”
Karakatsanis has the right to appeal to the Administrative Appeals Tribunal.