The Australian Securities and Investments Commission (ASIC) has applied to the Federal Court for the appointment of liquidators to Falcon Capital, the responsible entity for the First Guardian Master Fund, and for orders directing the liquidators to wind up First Guardian.
ASIC is also seeking the appointment of a receiver and manager to the personal property of one of Falcon’s directors, David Anderson.
In February, ASIC sought for the assets of Falcon, First Guardian and Anderson to be frozen, with the Court making orders to that effect on 24 February.
“ASIC is concerned about the management and operation of First Guardian and the associated risks to investors. Withdrawals from First Guardian have been suspended with limited exceptions since May 2024,” ASIC said on Monday.
The regulator has alleged that:
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approximately $274 million of First Guardian’s value arises from cash receivables in respect of which payments are many months late;
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in excess of $23 million of First Guardian’s assets appear to have been paid to entities purportedly providing marketing services which appears contrary to representations made to investors;
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First Guardian has invested in entities which Anderson had an association with or financial interest in and Falcon appears to have failed to recognise and manage consequent conflicts of interest;
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investors may have been exposed to classes of assets that differ from what was disclosed to them at the time of making their investment; and
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investors may have been misled about the security of their investment and likely returns.
The matter has been listed for hearing on 9 April 2025.
“ASIC’s investigation of First Guardian is continuing. ASIC’s investigation to date suggests that many investors were called by lead generators and referred to personal financial advice providers who advised them to roll their superannuation assets into a retail choice superannuation fund and then invest into First Guardian,” ASIC said.
“Some consumers received advice to set up self-managed superannuation funds (SMSFs) to facilitate investments into First Guardian.”
Last month, following an ASIC application, the Federal Court made interim orders freezing certain assets of financial adviser Ferras Merhi in connection with its investigations concerning certain managed investment schemes, including First Guardian.
Merhi controls Venture Egg Financial Services, and both he and Venture Egg are authorised representatives of Interprac Financial Planning. He also controls Financial Services Group Australia, which also holds an AFSL.
On the same day, the Federal Court also made interim orders freezing certain assets of Osama Saad, former director of Aus Super Compare and Atlas Marketing, both of which are now in liquidation, which also had connections with First Guardian.
ASIC added that, on 11 March 2025, Falcon published an update to its investors concerning the freezing orders obtained by ASIC and stated it was currently working with its advisers to develop a plan to implement an orderly wind down of First Guardian.
