Victims’ advocate says Crole banning ‘best thing ASIC has done’

Shield and First Guardian victims’ advocate Melinda Kee says the 10-year ban of former InterPrac managing director Garry Crole, announced by the Australian Securities and Investments Commission on Tuesday, is “one of the best things I think ASIC has done”.

ASIC has banned Crole, who stepped down as Sequoia Financial Group chief executive on 22 July but remains a substantial shareholder in the beleaguered ASX-listed wealth management group, from performing, as a director or responsible manager, any function involved in carrying on a financial services business.

ASIC said it found that Crole was not a fit and proper person, was not competent, and lacked the diligence and judgement required to perform one or more functions as an officer of an entity carrying on a financial services business.

It said InterPrac authorised representatives Venture Egg and Rhys Reilly advised thousands of clients to invest their superannuation in the First Guardian and Shield master funds, which both subsequently collapsed.

It found that Crole was “aware of serious concerns regarding the representatives’ financial advice model, which included the use of lead generators, and failed to adequately respond to these concerns”.

ASIC also found that Crole did not take adequate care in the management and oversight of InterPrac’s approved product list, which included First Guardian and Shield.

“They hit the nail on the head. They absolutely hit the nail on the head,” Kee tells Professional Planner.

“Personally, I feel as though he has shown no regard for the impact that InterPrac has had on the investors, particularly being somebody that’s been pulled into the Federal Court case of InterPrac versus AFCA. Fighting a determination is just appalling. 

“Every member of AFCA signs up to be bound by the laws of AFCA, yet he chose to fight it, to the detriment of investors. Putting more time onto the sentence that they’re already enduring, I find personally despicable. So I think ASIC have summed it up incredibly well.”

A spokesperson for Sequoia said that the company “notes ASIC’s announcement of 8 September 2026 concerning Mr Garry Crole”.

The spokesperson told Professional Planner that Crole “ceased to be a director of Sequoia in July 2026 and holds no role with the company or its subsidiaries”.

“Sequoia has engaged constructively with ASIC and is focused on supporting clients affected by the collapse of the First Guardian and Shield funds. As this matter and related proceedings remain ongoing, it would not be appropriate to comment further.”

Last month Crole, in the role of founder of Zen Advisory Solutions, began publishing The Zen Letter, aimed at “a select group of advisers and professional investors who meet the wholesale or professional investor status”.

“As I step away from my role as CEO of Sequoia and turn to the next chapter of my career, I’ve been reflecting on what I’ve learned not just from building and running businesses, but from the advisers, investors and mentors who shaped the way I think about capital and risk,” Crole writes in the first edition.

Crole writes that the newsletter is “not for retail clients”.

“It reflects my own view, formed out of my own research as I look to build my own concentrated small-cap portfolio over the next 12 months.”

The fight continues

Meanwhile, thousands of victims, Kee among them, continue to fight for compensation after being advised by representatives authorised by the licensee led by Crole to invest their superannuation savings in the collapsed Shield and First Guardian master funds. 

Kee has urged senators to back proposed amendments to how the Compensation Scheme of Last Resort (CSLR) works that are designed to make payment of compensation to victims faster and less stressful after they receive a favourable determination by the Australian Financial Complaints Authority (AFCA).

Amendments to the Regulatory Reform Omnibus Bill 2026 would reduce the disallowance period for CSLR funding from 15 sitting days to five and, if the annual levy does not cover scheme costs for a levy period, allow the scheme to notify the minister of a revised estimate of the total claims, fees and costs earlier than it can now. The minister may then determine that a special levy is payable.

A supplementary explanatory memorandum to the bill says that under the current framework, ASIC does not collect special levies until the 15 sitting day disallowance period has expired, “due to the risks of invoicing entities for amounts that are subsequently amended, reduced or disallowed”.

“The period between the CSLR notifying the minister of a funding shortfall and receipt of funds can average more than eight months, contributing to delays in compensation payments to eligible consumers, including those who have already been determined to be eligible for compensation,” it says.

The practical upshot is that the CSLR would have money available to pay compensation as it’s required, and to be able to compensate consumers more quickly than it can now. These changes on their own would not affect the quantum of funding it receives, just the timing.

“Potentially there’s no money in the CSLR until the beginning of the next financial year,” Kee says.

“That’s a massive amount of time for anybody to wait, particularly when they’ve already gone through this whole ordeal of AFCA.

“People are stressed. They really expect to get their determination and move on to the CSLR, go through that chapter, story closed, and get on with their life, [only] to find out that they’re dragged through another 12 months of anticipation. There’s never certainty until the money is back in the super balance. 

“I commend Minister [for Financial Services Daniel] Mulino and his team for continuing to work through these issues.”

Kee says every senator, “regardless of their political status” should back the changes as a step forward for investors. 

“If it means that investors who are ready to apply for the CSLR have the potential to be heard and compensated months earlier, then it’s a welcome change.

“We’re really targeting senators to back this, and not block it just because they didn’t come up with the idea. It’s important that Senators do get behind it because it’s in the best interest of their constituents in every state of Australia.”

Primary consumer benefit

The chief executive officer of the CSLR, David Berry, says the primary benefit for consumers from the changes to the scheme “is going to be the time it takes from us requesting the funds to us receiving funds that we can pay”.

“By reducing the disallowance days, it just means we can get the money faster so that we can pay the victims, because we are starting to see more people who are quite upset that they’re having to wait,” Berry tells Professional Planner.

“They’ve already had to wait with the [advice] firm, they’ve had to wait with AFCA, and they say, ‘Well, now that I’m approved, you’re telling me I have to wait with you because you don’t have the money’.”

Berry says that once the CSLR’s funding requirements reach the $20 million subsector cap for financial advice it must commence proceedings for a special levy, but it currently can’t request the special levy until the first of July each year.

“Our experience last year was we requested the money on the fourth of July and received the money in mid to late June, so it’s a 12-month process and people are just sitting and waiting for that length of time.”

Berry says the proposed amendments will also change the timing of when the scheme can advise the minister of its funding requirements.

“The intent is that we have the money ready at the start of each year, so that we can pay the compensation as the claims come through, as opposed to having to wait an extended period of time before being able to pay them.”

Kee says this is also a welcome change.

“We know these claims are coming, so we should be planning for the funding before we get there,” she says.

Berry says there is a delicate balance between maintaining the sustainability of an industry-funded scheme, and consumers’ right to be compensated.

“The scheme needs to be sustainable and it needs to build trust with the community,” he says.

“We’re wanting to make sure that whatever changes do go through are going to benefit the whole system and increase trust, particularly in the personal financial advice space.”