ASIC takes Falcon Capital directors to court over First Guardian collapse

The Australian Securities and Investments Commission is suing former Falcon Capital directors David Anderson and Simon Selimaj for alleged “serious and widespread failures in the management and oversight” of hundreds of millions of dollars of Australians’ superannuation invested in the First Guardian Master Fund.

Anderson is the former managing director and CEO and Selimaj the former executive chairman and chief investment officer of Falcon Capital, the responsible entity of First Guardian.

ASIC alleges investors were exposed to “high-risk, undocumented and conflicted investments”, and is seeking leave of the court to seek civil penalty proceedings against Falcon Capital, which is in liquidation.

ASIC alleges investments were made by Falcon Capital with inadequate documentation, insufficient security, inadequate due diligence, and unmanaged conflicts of interest.

These conflicts of interest include investments in hospitality and technology businesses Anderson had a personal interest, and payments of $57 million to entities controlled by Anderson or Selimaj.

“Hundreds of millions of dollars were allegedly channelled into high-risk and conflicted investments with inadequate scrutiny, oversight, or governance and without regard to members,” ASIC chair Sarah Court said in a statement.

ASIC also alleges that between August 2019 and April 2025, more than 6000 Australians invested more than $600 million of their superannuation savings in First Guardian, and that Falcon Capital invested $270 million through unregistered underlying funds it controlled, with substantial amounts paid to a range of entities and ventures without appropriate safeguards.

“These were Australians’ retirement savings, yet ASIC alleges millions of dollars were handed over before contracts were even in place, including for investments linked to those running the fund,” Court said.

ASIC also alleges Falcon Capital misled investors by representing that First Guardian had a robust investment process; and that despite representations that it would not invest in businesses involving alcoholic beverages, it invested in one such company.

There are allegations of $15 million paid to Maleo Indonesia that was undocumented and agreements with Maleo Singapore that purported to create assets worth $188 million on First Guardian’s balance sheets but had no or little value.

ASIC alleges Falcon Capital paid at least $27.9 million towards property developments, on an undocumented, unsecured basis, and without adequate due diligence.

Melinda Kee, an investor in First Guardian who has become an outspoken victims’ advocate since the collapse, told Professional Planner on 27 October that there are properties in Indonesia that she can’t see the value in. Kee visited these properties earlier this year.

“I can’t fathom the amount of money that went out to Indonesia and how that’s gone,” Kee said.

ASIC alleges Anderson controlled investment decisions without meaningful oversight, failed to disclose conflicts of interest and failed to act in members’ best interests, while Selimaj failed to act in members’ best interests by inadequately monitoring Falcon Capital’s activities.

“The allegations in ASIC’s case against First Guardian highlight the problems ASIC has identified in private credit, including poor governance, conflicts of interest and weak oversight, and the consequences these can have for Australians’ investments and retirement savings,” Court said.

“ASIC has now commenced proceedings against key former officeholders of both Shield and First Guardian, and we will continue to pursue those we believe are responsible for putting Australians’ retirement savings at risk.”

ASIC has already started proceedings against Ferras Merhi, who ran Venture Egg and Financial Services Group Australia, alleging he 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 including for marketing Shield and First Guardian to clients. A case management hearing is listed for 4 June 2027.