1 Comment 1 Commentby Niko Kloeten
The 53-year-old, who ran Investment Solutions in Albany, was sentenced yesterday at the North Shore District Court after being convicted on four Crimes Act charges laid by the Serious Fraud Office (SFO).
The charges relate to the misapplication of investor funds and false statements in investor reports by Cherry while he was the director of Albany-based firm Investment Solutions Limited (ISL) and related companies that received about $9 million from an estimated 175 investors.
Between January 2001 and February 2007 when the majority of offending occurred, he invested about $5 million of funds contrary to client instructions.
The majority of the investors involved had transferred to investments offered by Cherry’s personal advisory business from Sovereign, which he left in 1996 and had no association with ISL.
The SFO said investors “tended to be people who were not necessarily experienced or sophisticated investors, varying in age, and looking to invest surplus capital in order to extract profit.
“On some occasions, they were advised by Mr Cherry to extract equity from their homes, or otherwise borrow funds for use in his investment scheme.”
Cherry used investor funds to repay other investors’ investments (known as a Ponzi scheme), and for his own use, including paying off personal loans and purchasing a boat.
SFO Acting Chief Executive, Simon McArley, said the good faith that investors placed in Cherry was betrayed.
“We feel for all those who lost their money through Mr Cherry’s dealings, he built up a false level of trust with them and many will never recover from their losses,” he said.
“This case is one of a series of similar cases we have dealt with over the past year or so where trusted investment advisors have manipulated or failed to invest investors’ funds as promised and provided false statements to conceal losses or misappropriations.
“We continue to warn those wishing to invest to remember every investment is business, not personal,” he said.
Niko Kloeten can be contacted at niko@goodreturns.co.nz
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