Sequoia-owned licensee InterPrac is in the process of terminating its relationship with Reilly Financial, one of the advice firms under investigation by the corporate regulator as part of its response to the $1.2 billion Shield and First Guardian collapse.
InterPrac is under investigation by ASIC for its involvement in the failures of Shield and First Guardian, as are two of its member firms, Venture Egg and Reilly Financial, along with a handful of self-licensed firms. Reilly Financial managing director Rhys Reilly has been named by the Federal Court of Australia as also being under investigation.
ASIC has taken enforcement action against advisers and licensees involved in Shield and First Guardian due to concerns lead generators were aggressively pursuing consumers and handing them to advisers who would put them in high-risk products against their best interests.
A spokesperson for Sequoia, which is listed on the ASX, told Professional Planner InterPrac is “in the process of terminating its relationship with Reilly Financial”, one of the firms singled out by ASIC.
Reilly Financial declined to comment via a legal representative.
Reilly is still listed on the ASIC Financial Advisers Register as an authorised representative (AR) of InterPrac, but has also been appointed as an AR of another licensee Conexus Group since 5 August 2025 (which has no relation to Conexus Financial, publisher of Professional Planner).
InterPrac had previously ceased Venture Egg’s authorised status, along with that of principal adviser Ferras Merhi.
Along with being licensed by InterPrac, Merhi controlled another licence, Financial Services Group Australia, which was cancelled by ASIC in June.
Merhi had only been a “ceased” adviser on the ASIC Financial Adviser Register since the end of May and a spokesperson from InterPrac confirmed to Professional Planner in June the licensee had taken action.
Late last week Sequoia announced former ASIC Commissioner Danielle Press had been appointed to lead a dedicated governance committee.
The failures of the Shield and First Guardian master funds have put over $1 billion of retirement savings from 11,000 clients in limbo.
ASIC revealed in early July that more resources have been dedicated to its ongoing investigation into the failures of Shield and First Guardian.
Merhi has been one of the higher profile advisers caught up in the scandal. Merhi and Osama Saad – who ran the telemarketing business that referred clients to the firm – are under investigation by ASIC, and the Federal Court has extended their travel restraint arrangements.
Additionally, the Sequoia spokesperson said Merhi and Venture Egg were 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.
Merhi has yet to be banned by ASIC due to ongoing investigations but the regulator had banned two advisers from MWL Financial Services for giving inappropriate advice about Shield.
Saad was previously a financial adviser, last licensed to InterPrac, and ceased being registered on the ASIC Financial Advisers Register on 31 December 2021.
The responsible entities (REs) for the funds, Keystone Asset Management and Falcon Capital for Shield and First Guardian respectively, are also being investigated by ASIC and both are in liquidation.
Keystone directors Paul Chiodo and Ilya Frolov, and Falcon Capital directors David Anderson and Simon Selimaj, are all under investigation.
Anderson and Selimaj have both had assets frozen and been restricted from leaving Australia until 27 February 2026 after the court granted ASIC’s request for travel restraints.
The regulator is investigating the platforms that hosted these products, including Macquarie and Equity Trustees.
Sequoia has been involved with other industry scandals. Last August, its subsidiary Libertas became the first AFSL to be cancelled by the corporate regulator for failing to pay an outstanding AFCA determination that has gone to the Compensation Scheme of Last Resort.
The move by a parent company to put a subsidiary into voluntary administration to avoid financial liabilities drew comparisons to Dixon Advisory, which similarly left the advice sector footing the bill to compensate financial misconduct and potentially creating a loophole in the regulation.
