The Federal Court has ordered a review of the assets of Shield and First Guardian-linked adviser Ferras Merhi due to concerns from ASIC that he hasn’t been forthcoming with disclosure.
On Monday evening, the court ordered the appointment of a receiver to identify all assets and liabilities of Merhi and provide a report to the court within 90 days, with Justice Mark Moshinsky acknowledging ASIC’s concerns and the evidence presented in support.
A provisional liquidator has also been appointed to Venture Egg and United Financial Advice who will report to the court on the financial position, solvency, likely returns to creditors and any suspected misconduct in the firm within the next 28 days.
Merhi’s assets have been frozen since February 2025, but the regulator presented evidence in court last week that he had regularly failed to disclose assets until ASIC had discovered them and confronted him about it.
This included a US$9.6 million ($14.64 million) entity incorporated in the Cayman Islands which was alleged to have received inflows from companies connected to investments made by First Guardian.
He has been restrained from leaving Australia since July 2025, along with alleged co-conspirator Osama Saad, who was the former director of marketing/lead generation companies Aus Super Compare and Atlas Marketing.
Merhi was an authorised representative of Sequoia-owned InterPrac Financial Planning and held his own license, Financial Services Group Australia.
FSGA is now in liquidation and has had its license cancelled; clients of the firm have until 4 June 2026 to make an AFCA complaint.
ASIC alleged that between 2020 and 2024 Merhi and advisers working for him advised clients to invest around $296 million of their superannuation into First Guardian and around $230 million into Shield.
It’s been alleged by ASIC that 6000 clients received Statements of Advice from Venture Egg or FSGA within a period of just three years, ultimately moving $500 million into the products.
ASIC alleged Merhi received nearly $18 million in upfront advice fees as well as $19 million from entities associated with First Guardian to market the fund.
ASIC alleged in court last week that Merhi obtained loans from First Guardian to purchase his advice firms and that those funds far exceeded the purchase price.
Further orders were secured restraining Merhi from operating within the financial services industry following the regulator’s allegations that Merhi engaged in unconscionable conduct, failed to act in the best interests of clients, gave conflicted advice and provided defective statements of advice while receiving millions of dollars.
“[Monday’s] outcome immediately restrains Mr Merhi, or through his servants, agents or employees, from carrying on any business related to financial products or financial services, providing financial product advice, dealing in financial products, or marketing superannuation or managed investment scheme products,” ASIC said.
The regulator had raised concerns about the “industrial scale” pipeline of lead generation services supplying leads to advisers who made clients rollover their super funds without factoring in the best interest duty.
It’s left $1.2 billion worth of retirement savings for 11,000 Australians in limbo after ASIC commenced stop orders against Shield and First Guardian due to concerns of mismanagement of investor money, including spending money on personal expenses or investing in pet projects of directors of the fund.
ASIC said it is investigating 140 advisers, as well as the “gatekeepers” in the advice chain including platforms, researchers and auditors.
Macquarie had already made an agreement with ASIC to remediate Shield investors for $321 million, which would return them to their initial position before entering the fund.
Netwealth has applied for government assistance to remediate clients, Diversa Trustees will also pursue an application and Equity Trustees is likely to also follow suit.
“Diversa considers the First Guardian Master Fund’s losses to have resulted from fraudulent conduct,” a statement from Diversa provided to Professional Planner said.
Equity Trustees was trustee for NQ Super which held Shield and First Guardian and DASH’s Super Simplifier.
Diversa was trustee for Praemium Super, Australian Practical Superannuation and YourChoice Super, all three platforms are currently owned by Praemium.
