ASX-listed Sequoia Financial Group entered into a trading halt on Friday after revelations earlier in the week that it was in talks to sell the troubled InterPrac licensee.
The announcements came not long after the group told shareholders that HUB24 had expanded its earlier ban on InterPrac advisers and days after it revealed InterPrac is in sales talks.
Professional Planner reported last month that HUB24 had quietly banned InterPrac advisers on a case-by-case basis last year, but the latest announcement has expanded that to all advisers in the licensee.
Following reports from The Australian earlier this week about the expanded blacklist, Sequoia made the disclosure to the ASX on Thursday evening after the market closed.
Sequoia said that the change will apply to new business only and there will be no impact on existing client accounts, existing business, or current adviser remuneration arrangements on the HUB24 platform.
The change kicks in on 31 March 2026 and follows other bans from BT, AMP, CFS, Macquarie and Netwealth.
“Sequoia is engaging with relevant stakeholders to manage the transition and to support affected advisers in placing new business with alternative platform providers where appropriate,” the company said.
The company entered a trading halt on Friday morning, around 90 minutes after the market opened.
The licensee is being sued by ASIC for due diligence failures relating to authorised representatives Ferras Merhi and Rhys Reilly for their distribution of the Shield and First Guardian funds.
Sequoia managing director Garry Crole has publicly lobbied for trustees to utilise their operational risk reserves or ask for government assistance to remediate clients, often arguing they were just as culpable as any other party.
Macquarie hosted Shield, while Netwealth hosted First Guardian, and both organisations settled with ASIC to remediate clients by purchasing their investments and remediating them to their initial investment positions.
The federal court confirmed on Friday that Macquarie breached the law by failing to place the Shield Master Fund on a watch list for heightened monitoring, a concession made by the wealth giant in the Statement of Agreed Facts as part the settlement announced last year.
Equity Trustees and Diversa Trustees are both in court against the regulator after electing to fight allegations that their processes were insufficient rather than settling as was the case with Netwealth and Macquarie.
Investments in Shield and First Guardian grew due to a sophisticated network of lead generators that contacted people who used online “superannuation health check” advertisements and used high-pressure sales tactics to refer them to financial advisers.
ASIC acted against the Shield and First Guardian funds over concerns that investor money was being misused on high-risk investments, pet projects of the directors and personal expenses.
Merhi, who was an authorised representative of InterPrac, is considered by ASIC to be a central figure in the distribution of the funds and has been taken to court by the regulator over allegations he received money from the funds to help market them through lead generators.
ASIC has alleged Merhi distributed 6000 Statements of Advice under his name within a three-year period.
Former ASIC Commissioner Danielle Press was enlisted to help lift licensee governance standards at Sequoia, but Professional Planner revealed last month that she departed due to concerns the company wasn’t moving in a positive direction.
InterPrac is also suing the Australian Financial Complaints Authority over concerns that the authority has not fairly handled the complaints resolution process after it released the lead determination last month.
