Former ASIC Commissioner Danielle Press has been appointed to lead a dedicated governance committee for Sequoia Financial Group, which has been embroiled in the failures of Shield and First Guardian.
The AFSL governance commit has been formed to provide “premium oversight, enhance coordination and reinforce governance excellence” at the troubled group.
“This new committee reflects Sequoia’s ongoing commitment to the highest standards of regulatory alignment, governance maturity, and risk management,” Sequoia said in a statement to the ASX on Friday afternoon.
“It introduces an elevated and independent governance layer above the operational compliance structures of each AFSL and will in conjunction with the executive report to the SEQ boards risk and compliance committee.”
The group’s subsidiary InterPrac is under investigation by ASIC for the involvement of its authorised representatives, Venture Egg and Reilly Financial, in leading clients into the failed Shield and First Guardian products through lead generation services that involved high-pressure sales tactics.
Earlier this week, Sequoia went into a trading halt after its share price dropped over 30 per cent in the past six months and it recieved a speeding ticket from the ASX.
The group also announced this week that Charles Sweeney, a non-executive director and former chair of the risk and compliance committee, resigned this week as it was difficult to “balance his other commitments” with his role at Sequoia.
ASIC is investigating InterPrac, along with several of its authorised representatives including Ferras Merhi who also controlled the Financial Services Group Australia licensee.
FSGA’s licence was banned by ASIC in June and Merhi was removed from the ASIC Financial Adviser Register by InterPrac in late May.
An InterPrac spokesperson told Professional Planner in June Merhi and Venture Egg had been placed under very stringent compliance requirements from December 2023 that saw all new business from that point in time under the InterPrac AFSL cease entirety.
Two reports from The Australian in the past week alleged clients of First Guardian had their money put into shares of Sequoia, while Shield investor money helped Sequoia secure the $40.5m sale of Morrison Securities to New Quantum in 2023.
Press was an ASIC Commissioner between 2018 and 2023, as well as previously being CEO of Equip Super and managing director of UBS Global Asset Management (Australia).
She also holds other governance appointments including chair of Insignia Financial’s trustees board, chair of the Customer Owned Banking Code Compliance Committee, non-executive director at Infrastructure Specialist Asset Management and non-executive director at Income Asset Management Group.
The committee will be made up of independent members Press and Matthew Wilson. Wilson was a former managing director of IG Markets Asia Pacific and a senior executive in stockbroking and investment product development at Deutsche Bank.
“Mr Wilson’s expertise across advice, stockbroking, and product development will be critical in supporting the governance and oversight of each licensee’s Approved Product List,” the statement said.
“His appointment ensures that Sequoia’s investment governance practices remain aligned with its risk and compliance objectives, delivering consistency and integrity across all AFSLs.”
They’ll be joined on the committee by Sequoia CEO Garry Crole, head of licensee and adviser services division Daryl Stout, head of legal Justin Harding, director of Sequoia Wealth Management and Sequoia Asset Management Hamish McCathie, senior risk and compliance manage Mark Hutchinson, and head of InterPrac compliance operations Steve Kallona.
