CBA Senior Financial Planner Avoids Prison for Fraud

“It was not a momentary lapse of judgment. It involved 18 clients and it breached his employer’s trust and the clients’ trust”, Queensland magistrate Cathy McLennan remarked when sentencing former CBA senior financial planner Ricky Gillespie for fraud.

“It really does require a sentence to be imposed that will provide adequate deterrence to ensure that investors, who these days often are retired people who have no other means of earning a livelihood except for their investments… are properly protected”, Her Honour added.

Despite her words, the magistrate proceeded to impose a $3,000 fine without recording a criminal conviction against Mr Gillespie’s name – which is a sentencing option available in the sunshine state.

And while the maximum sentence for his offence of ‘forging client signatures’ is three years’ imprisonment, Her Honour did not impose any other penalty – no suspended sentence, no community service and no good behaviour bond.

The sentence has confirmed the views of many that white collar and financial criminals are often treated more leniently by the courts than those who commit other types of offences.

The conduct

Mr Gillespie was Ricky Gillespie pleaded guilty to forging 33 documents between January 2007 and June 2009.

He purported to sign as his clients on a number of administrative and compliance documents, including applications for financial products and forms used as part of the bank’s internal audit process.

Her Honour heard the stories of those adversely affected by Gillespie’s conduct, including victims Leonie and Peter Crowe who invested $1 million dollars with the bank in 2007. The couple lost hundreds of thousands of dollars within two years, later finding that Gillespie had signed many of the necessary compliance documents on their behalf to facilitate investments.

The sentencing

In reaching her sentence, magistrate McLennan took into account Gillespie’s relatively “young age” of thirty years when he commenced committing the offences and the fact he had “lost his career” after being banned by the Australian Securities and Investments Commission from engaging in financial planning for the rest of his life.

“That is a significant penalty that he has already endured,” Judge McLennan remarked.

She also took into account the adverse media attention and the difficulties a criminal conviction would have on Gillespie’s future job prospects.

Her Honour remarked that, “the defendant was primarily motivated by an intention to cover up his failures to comply with the Commonwealth Financial Planning compliance policies and avoid disciplinary action or dismissal”, rather than for any direct financial benefit.

Criticism of sentence

Jeff Morris, a whistleblower from CBA’s planning arm, expressed disappointment with the leniency afforded to the senior financial planner.

“Bearing in mind that he was in a fiduciary position when he forged those signatures, and the years of misery that ensued for so many people getting their money back, the penalty seems quite paltry,” Mr Morris stated.

Gillespie was one of several CBA financial planners found to have acting fraudulently after Mr Morris made a complaint to ASIC in October 2008.

CBA became aware of the forgery allegations against Gillespie at least nine months before accepting his resignation in 2009. The bank was later criticised for failing to dismiss him for misconduct.