Former Reiwa-Capital Director Sentenced to 32 Months in Prison for Misusing A$440K in Investor Funds

The Australian Securities and Investments Commission (ASIC) announced today that Russell Sandiford, the former director of Reiwa-Capital, has been sentenced in the District Court of New South Wales to two years and eight months imprisonment, to be served by way of an Intensive Correction Order (ICO), for his dishonest use of investor funds.

Mr. Sandiford pleaded guilty to two counts of dishonest conduct in connection with a financial product and was sentenced on September 6, 2024. 

Between January 2020 and June 2022, Mr. Sandiford contacted individuals using email addresses he previously held while working as a market trader and analyst at brokerage firms. Mr. Sandiford invited then email recipients to participate in one of two funds:

• A ‘Hedge Fund’ which offered, for a nominal one-off fee, a split of profits from a trading account operated by Mr Sandiford trading in foreign exchange products and commodities, and 
• An ‘Income Fund’ where investors would pay a capital investment amount on the basis it would be paid into a larger pool of funds to be used to trade foreign exchange products and commodities for the profit of investors.

Over a period of two and a half years, 74 clients paid Mr. Sandiford A$440,909 to invest or trade through these funds. Mr. Sandiford used these funds primarily for personal expenses or non-trading-related purposes, including gambling and personal entertainment, rather than investing or trading as agreed. Of the A$440,909 received by Mr. Sandiford, only A$6,316 was returned to investors. The other amounts weren’t repaid.

In passing sentence, the court noted that Mr. Sandiford's crimes were “brazen” and involved a “serious breach of the trust that he deliberately cultivated with his customers”.