ASIC has moved to liquidate another managed fund accused of conflicts of interest that benefited from advised client money via a lead referral agency.
The regulator announced on Monday evening it had applied to the Federal Court for the appointment of liquidators to Falcon Capital Limited, the responsible entity (RE) for the First Guardian Master Fund, to wind up the fund.
ASIC alleged First Guardian was another instance of investors been called by lead generators who referred potential clients to financial advisers who advised them to either roll their superannuation into a retail choice fund or set up an SMSF to invest into First Guardian.
The move follows Federal Court orders on behalf of the regulator to freeze assets of First Guardian and Falcon to protect investor funds while an investigation is continuing, after withdrawals from the fund were suspended on 27 May 2024.
ASIC has also sought the appointment of a receiver and manager to the personal property of one of Falcon’s directors, David Anderson, who’s assets have also been frozen under court order.
The orders to freeze the assets of Falcon, First Guardian and Anderson were made on 24 February and have since been extended by the court on 27 February, 12 March and 17 March.
An update to investors has since been published by the RE, stating it is currently working with advisers to develop a plan to implement an orderly wind down of the First Guardian fund.
The fund draws similarities to those of Shield Master Fund as First Guardian is accused by ASIC of investing in activities Anderson had an “association or financial interest in” which the responsible equity failed to recognise and manage these conflicts of interest.
Falcon was the trustee of the Chiodo Diversified Property Development Fund until June 2021, when Keystone Asset Management took over as trustee.
Keystone is the RE of the Shield fund who ASIC alleged had seen a large proportion of the assets held by the fund had been directed to another fund connected to former Keystone director Paul Chiodo to fund property developments he was connected to.
One of the advisers caught up in ASIC’s action against First Guardian is Ferras Merhi, who’s assets had been frozen in mid-February in connection to the regulator’s investigations of specific managed investment schemes including Shield and First Guardian.
Merhi controls Venture Egg Financial Services, which was formerly known as Ferras Merhi Pty Ltd; and United Financial Advice, otherwise known as Financial Services Group Australia. Both Venture Egg and Merhi are authorised representatives of the Interprac Financial Planning AFSL, while FSGA also holds an AFSL.
Similarly, Osama Saad, who was the former director of Aus Super Compare, which was the lead generator service, has also been caught up in the scheme.
On Tuesday evening, the regulator announced the Federal Court has made orders freezing assets of Rashid Alshakshir, the director of lead generation services Lion & Horn, Nohap and Indigo Group, in connection with its investigations into Shield and First Guardian.
ASIC sought travel restriction orders against Alshakshir on 20 January 2025, which was dismissed on 22 January.
The regulator alleged investors in the First Guardian fund were exposed to asset classes different to what was disclosed to them at the time of making their investment and they may have been misled about the security of the investment and likely returns.
Over $23 million of First Guardian’s assets are alleged to have been paid to entities providing marketing services which appears contrary to representations made to investors.
The hearing will be held on 9 April 2025 and is part of ASIC’s regulatory enforcement crackdown on telemarketing lead generation for advisers with conflicted advice models.
