Ex-Currency Trader Jailed in Australia After Nearly Five-Year Case Comes To An End

Krishnan Rasaratnam was sentenced to 3 years and 3 months, after pleading guilty in 2011 to unlicensed currency trading

asic-logoA case that Forex Magnates originally reported about in 2009 finally comes to an end as the former director of Strategic Alternative Investments Pty Ltd (SAI), Krishnan Rasaratnam has today been sentenced to 39 months in jail by a Sydney Court.

According to the regulator’s announcement, the unlicensed currency trader had misappropriated investors’ funds into his own account and caused investors to lose $12 million. He then made false statements to the Australian Securities and Investment Commission (ASIC), following an ongoing legal proceeding that included investigations, his arrest by police in September 2009, and a series of court appearances since.

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Rasaratnam pleaded guilty in a Sydney court in 2011 to multiple counts of dishonest conduct in this case. Today he made another court appearance, at Downing Centre District Court, before Judge C Hoy who sentenced Rasaratnam to three years and three months in jail, with a minimum time to be served of 18 months before becoming eligible for parole.

Dishonest Conduct, ASIC Speaks Out

Specifically, Rasaratnam pleaded guilty to one count of using a false instrument and five counts of dishonest conduct while providing a financial service. In addition, one charge of using a false instrument, three charges of dishonest conduct and two charges of making false statements to ASIC were taken into account in his sentencing, under the prosecution of the Commonwealth Director of Public Prosecutions.

ASIC Commissioner John Price stated that the regulator will not stop his pursuit for legal conduct within its realm of jurisdiction. “Maintaining fair and efficient markets is key for ASIC and we will not hesitate to take action against those who engage in dishonest or deceptive representations,” Mr. Price said in a statement issued by ASIC. “This sentence recognises the seriousness of Mr Rasaratnam’s conduct and should serve to deter others from engaging in similar behaviour,” he added.

Judge Hoy, also referenced in the official ASIC press release, stressed that the seriousness of the conduct could not be overlooked. He pointed out the length of time over which the offences were committed; the significant amount of money that was invested and subsequently lost by investors; and the fact that Mr. Rasaratnam was in a position of trust in acting as a financial adviser, if not by name, but by actions.

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$12 Million in Losses for Investors

ASIC had cancelled SAI’s licence on December 1, 2006, although it was the holder of an Australian financial services (AFS) licence, provided product advice and dealt in derivative and foreign exchange contracts.

Between February 2006 and January 2008, Rasaratnam raised funds from investors by making false and misleading claims that SAI investments were low-risk, carried a high return and in some cases were capital guaranteed by a major investment bank.

Rasaratam, who was not licensed as a currency trader, misappropriated the investors’ funds by diverting those funds to his personal trading account. As a result of the purported investment activity by SAI investors, they incurred losses of more than $12 million.

His role was noted as the sole director, foreign currency trader and investment adviser for SAI.

Investigation Longer than Time Sentenced

This case has spanned over four years and dates back to allegations of over nearly a decade ago. Following are excerpts of some of the case adjournments, postponments and rescheduling involved:

  • It was alleged that between May 2005 and January 2007, Rasaratnam obtained funds from a number of locations including New South Wales, Queensland and Malaysia.
  • Rasaratnam was arrested by Hornsby Police on 21 August, 2009 and bailed to appear before the Hornsby Local Court.
  • Rasaratnam, of North Wahroonga, appeared in the Hornsby Local Court in Sydney on 13 charges relating to dishonest conduct, deception and providing false and misleading information to ASIC.
  • The matter was  transferred to the Downing Centre Local Court and scheduled to return to Court on 27 October, 2009.
  • On Wednesday, 22 September, 2010, Rasaratnam was committed to stand trial in the Sydney District Court. The matter was listed to return to Court on Friday, 8th of October, 2010 with an anticipated trial date to be set on this date.
  • Rasaratnam’s sentencing hearing was set for the 29th of March, 2012 but was adjourned until the 1st of June, 2012.
  • On the 1st of June, 2012 at Sydney’s Downing Centre District Court, Rasaratnam’s sentencing hearing was partly heard. The matter was adjourned until the 20th of July, 2012.
  • On the 19th of November, 2012 matter was heard at Sydney’s Downing Centre District Court where sentencing was adjourned until the 12th of April, 2013 at Parramatta District Court.
  • Rasaratnam’s partly heard sentence hearing did not proceed on the 12th of April 2013, but was adjourned until the 30th of May, 2013 at Sydney’s Downing Centre District Court.
  • On the 30th of May, 2013 at Sydney’s Downing Centre District Court, Rasaratnam’s sentence hearing was partly heard. The matter was adjourned until the 13th of September, 2013.
  • On the 13th of September, 2013 at Sydney’s Downing Centre District Court, Rasaratnam’s sentence hearing was partly heard. The matter was adjourned until the 22nd of November, 2013, at which time it was anticipated that a sentence would be handed down.
  • On the 22nd of November, 2013 at Sydney’s Downing Centre District Court, Rasaratnam’s sentence hearing was partly heard. The matter was adjourned until the 20th of December, 2013, at which time a sentence was anticipated to be handed down.
  • December 23, 2013, ASIC announces Rasaratnam’s sentence of 3 years and 3 months, by the Sydney Court.
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