Accountant and Adviser Liable After Clients Lose Millions in Stonepoint Fund

The Supreme Court of New South Wales has found that investors were misled after they invested millions of dollars into the Stonepoint Capital Fund.

In Garan Holdings Pty Ltd v Stonepoint Capital Management Pty Ltd (in liq) (No 2) [2026] NSWSC 373, the Court considered claims against an accountant and financial adviser, Mr Phillip Hunt, and related entities. The investors put about $17.9 million into the Stonepoint Capital Fund. They were told the investment was safe, secure, suitable and could be withdrawn quickly. The Court found that those statements were misleading.

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What Was the Stonepoint Capital Fund?

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The Stonepoint Capital Fund was promoted as an investment fund that would lend money to borrowers with proper security.

Investors were told, or led to believe, that:

• their money would be used for secured lending;
• the fund would focus on protecting capital;
• the fund was suitable for them;
• the investment could be redeemed on short notice;
• the fund could pay strong monthly returns.

The Court found that this was not how the fund operated.

The Court found that most of the investors’ money was lent to a related company called Fortico.  Fortico then used the money for high-risk foreign exchange trading. This was very different from the secured lending investment that investors had been led to expect.

The trading failed and significant investor money was lost. The investors recovered some funds, but more than $10.6 million remained unpaid or unredeemed.

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‍Why the Court Found the Investors Were Misled

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The Court found that the investors were misled because the fund was described as safe, secure and properly backed by security.

In reality, the fund was exposed to:

• one related company;
• high-risk foreign exchange trading;
• limited real security;
• poor liquidity;
• serious conflicts of interest.

The Court found that the investment did not have the level of safety, security or ability to withdraw funds that investors had been told.

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General Risk Warnings Were Not Enough

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The fund documents included general warnings that investments carry risk and returns are not guaranteed.  However, the Court found that those general warnings did not fix the problem.

The reason was simple: investors were not properly told how their money would actually be used.

General disclaimers may not protect an adviser, accountant or fund operator if investors are given a misleading impression about the real nature of the investment.

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Findings Against the Accountant, Adviser and Fund

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The investors succeeded almost completely.

The Court found that:

• Mr Hunt and related entities engaged in misleading or deceptive conduct;
• Mr Hunt and his accounting business gave negligent advice;
• Mr Hunt and his accounting business breached fiduciary duties;
• Stonepoint breached its duties as trustee of the fund;
• investor money was used in a way that was inconsistent with what investors had been told;
• related parties received or assisted with the misuse of trust money.

The Court found that Mr Hunt was not only promoting the investment. He was also the investors’ accountant and adviser. He knew they trusted him and relied on his advice.

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Key Lessons for Investors

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This decision is a reminder that investors should be cautious where:

• an adviser recommends an investment in which they have a personal or commercial interest;
• the promised returns appear unusually high;
• money is invested into related-party structures;
• funds cannot be redeemed when requested;
• investors are not clearly told how their money is actually being used

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How Financial Dispute Legal can help

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This case is important for investors who have lost money in:

• unlisted investment funds;
• private lending funds;
• mortgage funds;
• property funds;
• SMSF investments;
• related-party investment schemes;
• investments recommended by accountants or financial advisers;
• investments where withdrawals or redemptions have been delayed or refused.

The decision shows that advisers, accountants, trustees and fund operators may be liable if investors are encouraged to invest based on misleading statements, poor advice or undisclosed conflicts of interest.

If you invested in an unlisted fund, private lending scheme, property fund, SMSF investment or adviser-recommended product and have been unable to recover your funds, you can contact Financial Dispute Legal to discuss your circumstances and consider any rights to recover compensation on 1300 433 533 or enquiry@fdlegal.com.au

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