The Federal Court has frozen assets of financial adviser Ferras Merhi, who was caught in the middle of the ASIC investigation into the collapse of the $480 million Shield Master Fund.
Merhi controls Venture Egg Financial Services and United Financial Advice, trading as Venture Egg and Financial Services Group Australia. Venture Egg and Merhi are authorised representatives of Interprac Financial Planning, while FSGA also holds an AFSL. ASIC said these firms had advised clients to invest into Shield.
The court also froze the assets of Osama Saad, the former director of two marketing/lead generation companies Aus Super Compare and Atlas Marketing, which both went into liquidation in late 2024.
The interim orders against both are in place until 7pm on 4 April 2025, and a final hearing to decide whether the orders should continue has been scheduled for the same day.
The investigation has become one of ASIC’s key enforcement initiatives as the regulator tries to mitigate a rise in telemarketers using high pressure sales tactics to generate lead lists for advisers, who will put those clients into inappropriate or conflicted advice models.
Over a two-year period, more than $480 million was invested into the Shield fund by thousands of clients.
In February last year, ASIC made interim stop orders on the Shield Master Fund due to concerns there were misleading statements in regards to Keystone’s legal role in unregistered schemes the fund had invested in as well as not adequately disclosed the risks associated in those unregistered funds.
Keystone Asset Management is the responsible entity for Shield and is now in liquidation. ASIC has alleged a large proportion of the funds held had been directed to another fund connected to former Keystone director Paul Chiodo to fund property developments he was connected to.
The Federal Court froze assets of the fund in June and ordered Chiodo surrender his passport and be restrained from leaving Australia.
ASIC also raised concerns the fund both failed to adequately disclose the performance fees that may apply and used inappropriate asset classifications to describe the investments in the underlying funds and the investments within those funds.
These types of schemes often rely on an online super “health check” to grab customer details at the end of a short survey which circumvents anti-hawking laws, with this data then handed over to advisers who will offer a follow-up contact.
ASIC Commissioner Alan Kirkland had previously described how those advisers often pressure clients to move out a well-performing fund into a platform product or SMSF that is often higher risk and not in the client’s best interest.
“I wish I could say this is an isolated example, but it’s sadly similar to a pattern of conduct that we are seeing far too often where telemarketers recruit people and hand them over to advisers,” Kirkland said.
