In his opening address to Senate estimates on Thursday, Australian Securities and Investments Commission (ASIC) chair Joe Longo included court action against an adviser and former director, in connection with its investigation into the Shield Master Fund, among its “strong enforcement outcomes” already in 2025.
Following applications made by ASIC, the Federal Court made interim orders freezing certain assets of Melbourne-based financial adviser Ferras Merhi and Osama Saad, former director of Aus Super Compare Pty Ltd (in liquidation) and Atlas Marketing Pty Ltd (in liquidation).
“ASIC is investigating Mr Merhi and various entities associated with him, in connection with its investigations concerning certain managed investment schemes including the Shield Master Fund. These investigations are ongoing,” ASIC said, adding in a separate announcement that the same is true of Saad.
Merhi controls Venture Egg Financial Services Pty Ltd and United Financial Advice Pty Ltd, trading as Venture Egg and Financial Services Group Australia Pty Ltd (FSGA).
Both Venture Egg and Merhi are authorised representatives of licensee InterPrac Financial Planning Pty Ltd. FSGA also holds an Australian Financial Services Licence (AFSL).
Saad was a director of Aus Super Compare until September 2024 and the sole director of Atlas until November 2024. Both entities were placed into liquidation in late 2024.
According to Longo on Thursday, the “investigations around the Shield Master Fund are among the most complex that ASIC is undertaking at the moment”.
“I think they’re very serious for all Australians,” the chair said following questions from Senator Barbara Pocock.
“The amount of money involved, ordinary Australians being talked into doing things that really ought not to have occurred. There really is misconduct.”
The Shield fund, which is a registered managed investment scheme with Keystone Asset Management as the responsible entity, has led to ASIC investigations related to a broad range of parties related to the investments, including financial advisers such as Merhi.
“We have extensive concerns relating to the possible mishandling of significant superannuation monies that have been invested into that scheme, and we have taken a large number of investigation actions relating to a range of entities and individuals associated with the scheme,” deputy chair Sarah Court told the Senate, though refraining from detailing specific entities.
“Suffice to say, we’ve taken multiple court actions to protect investor funds. We’ve frozen assets, we’ve obtained travel restraints, we’ve had receivers and managers appointed, and we are … still likely at the early stages of what is an extensive investigation.”
According to the ASIC deputy chair, the regulator has “stood up several teams of investigators to work on these matters”, which she added is “not the only matter like this we have on our books at the moment”.
“The kind of figures that we’re concerned about here, and these have been publicly reported previously, are in the order of $480 million worth of investor funds and 5,800 investors potentially impacted. It’s a major issue,” Court said.
She added: “We’ve been very keen to get out messages to say to potential investors in relation to their superannuation funds, be very cautious about transferring your superannuation funds into a self-managed super fund for the purposes of unrealistic property investment returns. These are industrial scale models that we are seeing.”
In June 2024, ASIC obtained orders from the Federal Court freezing the assets of the Shield Master Fund, whose responsible entity is Keystone Asset Management.
The court also made orders that Paul Chiodo, a former director of Keystone, surrender his passport and be restrained from leaving Australia.
In September, ASIC applied for Keystone Asset Management (KAM) to be liquidated, with its creditors eventually resolving to have the firm wound up in December.
“The investigation to date suggests that potential investors were called by lead generators and referred to personal financial advice providers who advised investors to roll their superannuation assets into a retail choice superannuation fund and then to invest part or all of their superannuation into Shield,” the regulator said in December.
As a result of this, ASIC said its investigation of the circumstances surrounding Shield include KAM and its directors and officers, the role of the superannuation trustees, the financial advisers who recommended investors invest in Shield, the lead generators and others.
On Friday, ASIC also announced it had obtained interim orders in the Federal Court to freeze the assets of Falcon Capital Limited, the First Guardian Master Fund and David Anderson.
Falcon is the responsible entity for First Guardian and Anderson is a director of Falcon.
“ASIC sought the orders to help protect investor funds while an investigation is continuing,” the regulator said.
ASIC noted that the orders are subject to some limited exceptions, including to allow for the transfer of specific property of First Guardian under an existing sale agreement entered into by Falcon.
Specifically, this exception relates to units in the Chiodo Diversified Property Fund, which are subject to a units purchase agreement dated 31 March 2024 between Falcon and Asia Pacific Property Holdings LLC, “to the extent that those units need to be disposed of or transferred or otherwise dealt with in order to give effect to or for the performance by the first defendant of the units purchase agreement”.
According to an investor update earlier in February, Falcon was the trustee of the Chiodo Diversified Property Development Fund until June 2021, when Keystone Asset Management took over as trustee.
“Falcon as trustee of the Australian Development Fund held units in the Chiodo Diversified Property Development Fund until March 2024, when it divested its interest. Payment for that divested interest is held as a cash receivable,” Falcon told investors.
