How a top Sydney high school’s alumni club was caught in dud investment scheme

By Adele Ferguson and Lucy Carroll

Sydney Boys High School.Credit:The Sydney Morning Herald

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A non-profit club linked to Sydney Boys High School is caught up in a global investment scheme that many investors now believe is a dud.

The Sydney Morning Herald can reveal The High Club, a non-profit group set up by alumni of the selective public school, holds more than half a million shares in dubious investments Steppes Partners and Australian-based ALT Financial Group.

The alumni club is the latest in a string of investors revealed to be caught up in a scheme whereby investors were promised windfall profits on shares they were told would soon be listed. The shares have still not been listed.

Tony Lewis, a financial adviser who is part of the High Club.

Last month ALT Financial was convicted and fined $123,000 by the Australian Securities and Investments Commission after a series of breaches including failing to produce financial reports to shareholders – or the regulator – since at least 2018. ASIC described the offences as serious and said the fine was one of the largest imposed for those types of breaches.

The High Club was established in the 1950s to raise and invest funds for the advancement of education at Sydney Boys High School, and provide scholarships and bursaries for students.

A 2021 share register reveals that the club became an investor in ALT Financial Group in September 2016, buying 515,000 shares, four months after financial adviser Tony Lewis joined the High Club board.

Lewis, an alumnus of the school, along with long-time club president and finance director John Pointing, are listed as holding more than 2 million shares in ALT Financial personally, some in their self-managed super funds.

Lewis, a former bankrupt, has worked in the investment industry since 1978, including a stint from 2011 to 2013 at a financial services business run by David Sutton. Sutton sits on the board of ALT Financial and is being investigated by ASIC.

David Sutton is being investigated by ASIC.

In 2022, Lewis was forwarding Sutton emails written by disgruntled shareholders who had formed a support group to share their views on the investment products.

Lewis declined to answer questions about the club, or how he and the club came to invest in the shares.

But in an email, he said: “I have avoided your phone calls and emails because your enquires are based upon information most likely stolen from ASIC that has apparently been provided to you … Using this information is a breach of my privacy and the privacy of my clients.” He outlined penalties, “according to Google”, of up to $50 million for breaching privacy that he suggested this masthead and the journalists might be exposed to. He emailed again an hour later, saying: “I apologize for sending this ill-advised email.”

The High Club invested in the products, tying up funds in high-risk, unlisted stocks that have not been demonstrated to have any real value.

This masthead is not suggesting Lewis or anyone advising The High Club knew about any of the problems with the products at the time the investments were made; nor do we suggest Lewis made a commission or otherwise profited from the High Club’s investments in these products. It is also not suggested that Lewis is involved in the operation of the scheme.

Tony Lewis declined to answer the Herald’s questions.

The revelations form part of a year-long investigation by The Sydney Morning Herald, The Age and 60 Minutes into a global investment scheme – supposedly backed by billions in assets – that has embroiled thousands of investors from Australia and overseas.

The investigation found a number of financial advisers were paid hefty commissions of up to 30 per cent to sell products, including Steppes.

Last week ASIC banned one of the financial advisers, Kris Ridgway, after learning a year ago that he was selling the unauthorised products and earning secret commissions of up to 17 per cent from McFaddens Securities (formerly called Dayton Way), which is run by Sutton.

Ridgway was selling the products and pocketing the commissions while working as a senior financial adviser at Shaw and Partners in Brisbane. Ridgway was sacked in February 2022.

In a confession to the media investigation, Ridgway said he now believed the products, which included ALT Financial Group and Steppes, looked “100 per cent a sham”.

He said the products were supposed to be listed imminently, but years later, investors were still being strung along.

“They’re not providing shareholder statements. They’re not providing financial updates. They’re not providing updates as to where the companies are at with its listing. And they try desperately to avoid phone calls and any contact with shareholders or anybody else,” Ridgway said.

A ‘long-term investment’

In a statement, The High Club said it “invested in Steppes knowing it was a long-term investment and are aware of progress made”.

It would not disclose how much it paid for the 515,000 ALT Financial or Steppes shares, or whether it had invested in other unlisted shares linked to the international investment scheme. Other investors contacted by this masthead said in 2016 shares in Steppes and ALT Financial were selling for anywhere between 17.5 cents and 75 cents each, depending on the seller and the financial adviser. Based on these prices, the club could have invested between about $90,000 and $380,000.

The High Club invests in a range of assets, including non-listed shares, and donates funds to the school in the form of bursaries to students and other financial assistance.

Pointing, who has been president and finance director of the club since 2013, declined to comment on how the club was introduced to ALT Financial, who it was that brokered the deal, or details of his own purchase of the products.

According to a share register, Pointing personally purchased shares in Steppes and ALT Financial in 2016. Lewis is also listed as a shareholder, taking ownership of the shares while employed as an adviser at Sydney-based LEM Securities, where he is still listed as working.

LEM Securities said 10 clients had invested in the companies. It said the clients were sophisticated investors and that personal advice was not provided. It also said that the amounts invested by clients was nominal, representing less than 1.5 pe cent of any one individual’s investible assets.

It said almost two years ago it had provided information to ASIC and its insurer about these products. “We, like our clients, are very interested to learn what the true state of affairs are in relation to these companies,” it said.

“At no time has any client made a complaint regarding the conduct of Mr Lewis or indeed us in relation to this matter. The misconduct of Mr Ridgway identified in your articles has no correlation to our internal review of this matter.”

Pointing, like Lewis, is also not accused of wrongdoing in relation to the investments.

For more than a decade Lewis had been involved in a civil case relating to his deceased aunt’s estate, of which he was one of five beneficiaries. The case centred around Lewis, who in August 2008 transferred her $551,084 aged care home bond to Lewis Securities, a business he owned and operated. A month later he put Lewis Securities into administration, then liquidation and became bankrupt in May 2009. He was discharged from bankruptcy in 2012, meaning his involvement in the High Club was lawful.

The NSW Supreme Court judgment, handed down in September 2022, found that Lewis acted as an intermeddler dealing with the estate. It found his “debt was not extinguished because he engaged in a fraud or fraudulent breach of trust … by unilaterally investing almost the entirety of the estate’s funds in his own company”. The court concluded that he could not claim any of the estate until his debts to the estate had been repaid.

How The High Club works

The High Club has had a series of directors since it was incorporated in 1957 as a club for old boys, teachers and former teachers at Sydney Boys High.

The school’s website describes the club as providing an important source of funds for the school. “It donates money to the school for specific purposes. It provides social gatherings for staff and Old Boys to promote mutual help and friendship.”

Sydney Boys High School has two alumni groups: The High Club and The Sydney High School Old Boys Union. Both are run separately.

The old boys union committee told the Herald there had been no interaction between the two organisations in at least the past decade. The committee said the president of the old boys union applied to become a member of The High Club in September 2021, but his application was rejected by the board.

Sydney Boys High School principal Kim Jaggar did not respond to questions.

– with Naomi Shivaraman

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