On Wednesday, the Australian Securities and Investments Commission (ASIC) confirmed that the former managing director of Global Merces Funds Management, Holly Marie Grofski, had been sentenced to offences involving the falsification of documents and the provision of false information to an auditor.
After pleading guilty, Ms Grofski was sentenced on each count to six months imprisonment, to be released immediately upon entering a recognisance in the amount of $1,000 on the condition that she be of good behaviour for 18 months.
ASIC said that in her role as director of Global Merces, Ms Grofski had created a “loan agreement” which purported to show that the firm had received a loan of $500,000.
“The loan agreement was a false document which had not been executed. Ms Grofski arranged for the transfer of $500,000 of investor funds into the Global Merces operating account,” the regulator explained.
Additionally, ASIC noted that Ms Grofski had provided the falsified loan agreement and evidence of the $500,000 account balance to the auditors of Global Merces.
“Ms Grofski did so to convince the auditors that they did not need to raise concerns about the solvency of Global Merces, an Australian financial services licensee, with ASIC,” it said.
According to ASIC, Ms Grofski did not have authorisation to use $500,000 of investor funds for this purpose and shortly after providing the auditors with evidence of the account balance of Global Merces’ operating fund, Ms Grofski then transferred the funds out of the account, and they were invested in accordance with the investor’s instructions.
As a result of her dishonesty-based convictions, Ms Grofski will be automatically disqualified as a company director for five years. The matter was prosecuted by the Commonwealth Director of Public Prosecutions following an investigation and referral by ASIC.
ASIC suspended the Australian financial service (AFS) licence of Global Merces in January 2020. Following an application by ASIC, the Federal Court ordered that Global Merces be wound up later that month. The regulator then cancelled Global Merces’ licence in July 2020.
Ms Grofski had pleaded guilty to one count of providing false information to the auditors of Global Merces and one count of engaging in conduct resulting in the falsification of books and records relating to the affairs of Global Merces in October 2021.
