Holly Grofski, a former Global Merces executive, has been convicted of criminal charges.

ASIC, the financial regulator in Australia, has announced the sentencing of Holly Marie Grofski, the former managing director of Global Merces Funds Management Ltd (now in liquidation), for offenses involving document falsification and providing false information to an auditor.

After pleading guilty, Ms. Grofski was convicted and sentenced in the Brisbane District Court. Each count resulted in a six-month imprisonment term, which she was released from immediately upon entering a recognizance of $1,000. The condition of her release requires her to maintain good behavior for 18 months.

During her tenure as director of Global Merces, Ms. Grofski fabricated a 'loan agreement' to falsely indicate that Global Merces had received a loan of $500,000. This document was never executed. Subsequently, she transferred $500,000 of investor funds into the Global Merces operating account.

Additionally, Ms. Grofski provided the auditors of Global Merces with the falsified loan agreement and evidence of the $500,000 account balance. Her intention was to persuade the auditors not to raise concerns about the solvency of Global Merces, an Australian financial services licensee, with ASIC.

However, Ms. Grofski was not authorized to utilize $500,000 of investor funds in this manner. Soon after providing the auditors with evidence of the account balance in Global Merces' operating fund, she transferred the $500,000 out of that account and invested it according to the instructions of the investor.

As a consequence of her convictions based on dishonesty, Ms. Grofski will be automatically disqualified as a company director for a period of five years.

The Commonwealth Director of Public Prosecutions handled the prosecution in this case, following an investigation and referral by ASIC.

Background:

On October 28, 2021, Ms. Grofski 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 related to the affairs of Global Merces. On January 21, 2020, ASIC suspended the Australian financial service (AFS) license of Global Merces for a period of six months. On January 31, 2020, following an application by ASIC, the Federal Court ordered the winding up of Global Merces. On July 20, 2020, ASIC canceled the AFS license of Global Merces.