Jail sentence given to former Sydney financial adviser

Keith James Flowers, formerly known as Nigel Flowers, of Bathurst, New South Wales, was sentenced to three years and two months in prison, to be served on an Intensive Correctional Order, and to fined $9,500 for acting dishonestly as a corporate director and stealing funds from investors.

Between 1991 and 2012, Mr. Flowers was the founder and director of Flowers Financial Group Pty Ltd (in liquidation) and Flowers Financial Management Pty Ltd (in liquidation), specializing in financial advice to the medical and dental professions.

In 2011, Mr Flowers entered into a scheme to raise seed capital to fund an initial public offering proposed by Avior Australia Ltd, which would have resulted in the merger of Flowers Financial Management with other service companies financial. The scheme raised approximately $1.48 million from investors who were longtime clients of Mr. Flowers. These funds were collected in a trust account established by Mr. Flowers.

In October 2011, investors were notified that the initial public offering was to be postponed and that any remaining seed capital would be returned to investors.

Between June 2011 and May 2012, Mr. Flowers dishonestly used his position as a director and stole money by transferring $209,500 from the trust account in an attempt to obtain a benefit for himself and Flowers Financial Management.

Mr Flowers’ intensive correction order requires him to complete 500 hours of community service.

The case was prosecuted by the Commonwealth Director of Public Prosecutions after a referral from ASIC.

Background

ASIC’s investigation was aided by a report from the liquidators of Flowers Financial Management. The liquidators received funding from the Assetless Administration Fund to prepare and report their findings to ASIC.

Mr Flowers pleaded guilty to the charges at Downing Street District Court on December 18, 2020 (20-337MR).

In February 2012, Mr. Flowers was filed for bankruptcy and ASIC permanently disqualified Mr. Flowers in June 2014 from providing financial services and prohibited him from engaging in credit activities (14-130MR).