Former financial advisor Kristofer Ridgway reveals $6B investment scam

A former high-flying financial advisor at a top-level wealth management firm has made a grovelling apology after he was banned from working in the industry by the financial regulator for dodgy practices. 

Kristofer Ridgway was a senior advisor at the Brisbane offices of respected company Shaw and Partners until he was sacked in February 2022.

A formal complaint from one of his clients triggered a company investigation which  discovered Ridgway was secretly pouring millions of dollars in clients’ cash into unapproved investments in breach of the firm’s rules.

‘I don’t want to think of myself as a crook. But some of my actions in recent times have been terribly unlawful… I’m ashamed and I’m sorry,’ Ridgway tearfully told 60 Minutes in an interview airing on Sunday night.

Dozens of investors were robbed of their life savings by trusting Ridgeway who claims he was a ‘go between’ in a sophisticated international scheme involving an intricate web of shell companies worth a supposed $6.7billion.

However, arguably his greatest insults were saved for his wife of 35 years, Kerrilyn, who learned of Ridgway’s fraud when she received a text from the CEO of Shaw and Partners explaining he had been sacked.

When she confronted him, Ridgway walked out on her and their three children.

She described the experience as a ‘nightmare’. 

‘It’s been done by the person that I trusted most in the world. And, you know, there’s almost decades worth of lies and betrayal, and for what?’ she said.

In addition to the dodgy investment scheme, Ridgway had forged his wife’s signature on dozens of documents going back years – even legally installing her as a director on companies without her knowledge.

‘We were just blown away, completely blindsided… My eldest daughter was very upset and she said, ‘What have you done? What have you done?’ 

‘We read out some of what was in the text we got. He just said, ‘Oh, they don’t understand my business model.’

‘I just remember him just turning and walking out, and that was it.’ 

Ridgway admitted on Sunday that he was ‘really just thinking about myself and not the wellbeing of my family and my kids’.

Over Christmas, Kerrilyn agreed to speak to him again for the sake of their children only to learn he had been having an affair.

‘It was just a second level of betrayal and lies,’ she said.

Shaw and Partners contacted ASIC which began it’s own investigation 

Last week, the corporate regulator said Ridgeway has been ‘permanently banned from having any involvement in financial services’.

‘ASIC determined a permanent ban is necessary due to concerns that Mr Ridgway is not a fit and proper person to provide financial services, is not adequately trained or competent to provide financial services, and is likely to contravene financial services law,’ it said.

‘From 2015 to 2021, while an authorised representative of AFS licensee Shaw and Partners, Mr Ridgway recommended his clients invest in a range of international unlisted shares sourced by McFaddens Securities Pty Ltd.’

The scheme rewarded Ridgway with 17 per cent commissions for each new investor and was completely separate to his work for Shaw and Partners, with the disgraced financial adviser saying he ‘wanted to get something for himself’.

He pocketed about $1.6million in commissions, which are prohibited by law in the financial advising industry, and spent the money on flashy suits, sports cars, and luxury holidays.

The dodgy investment products he was selling were shares in companies he claimed were about to be publicly listed, promising his clients they could get in on the ground floor and make a fortune when the businesses floated.

But they never did. 

While clients were getting documents showing their money was growing, in reality, their investments were worthless.

Ridgeway claims the scheme was run by shadowy international figures who pull the strings.

‘They have hung me out to dry. I’ve been the fall person in all of this. They’re twiddling their thumbs, happy as Larry,’ he said.

ASIC said Ridgway ‘promoted international unlisted shares in pre-IPO companies including Steppes Alternative Asset Management, Trinus Impact Capital, and ASAF Critical Metals and its Australian subsidiary Aus Streaming Limited, which is now in liquidation.’

The companies are all registered in tax havens such as the Marshall Islands. 

Experienced auditor Stephen Helberg was hired to run Aus Streaming Investments by those behind the scheme and said it looked like a healthy proposed mining operation on paper.

But when he looked closer he realised the business had no money and no assets.

‘The asset value in the balance sheet was $138 million,’ he said. 

‘And as I progressed, I realised about six months later there’s absolutely nothing to the assets that they’ve actually reported in the balance sheet.’

He began to unravel a complicated web of holdings, cross holdings and shell companies that claimed on paper to be worth $6.7billion – but which all had dubious financial statements.

He quit in 2017 and called in his lawyers, claiming he is owed about $250,000 in unpaid salary.

It’s alleged Ridgway’s conduct impacted about 40 clients and involved around $3.5 million being placed in the products, which were not approved by Shaw and Partners.

Ridgway claims even he doesn’t know where that money is now.

He said when he first learned of the scheme he thought it was legitimate but when he began to have doubts he doubled-down.

‘Because you’re in so deep… You don’t really know what else to do, you know, so you kind of just cling on to these ideas that it’s all going to be fine, and people are gonna go make money, and you stick your head in the sand.’

‘Eventually, that doesn’t work anymore.’

Shaw and Partners has said even though Ridgway was working on the scheme under-the-table they are looking into possibly reimbursing those clients he duped.