By First Guardian
TIL CreativesThousands of Australians are unable to access their superannuation after the collapse of the First Guardian Master Fund, now under ASIC investigation (AI generated image)
Thousands of Australians at risk as superannuation fund collapsesOver 6,000 Australian investors may lose access to their retirement savings following the collapse of the First Guardian Master Fund. The fund, which received $590 million in superannuation investments, is now under investigation by the Australian Securities and Investments Commission (ASIC) for potential misuse of investor funds and undisclosed conflicts of interest.The First Guardian Master Fund was registered in August, 2019 as a managed investment scheme. Falcon Capital Limited, based in Melbourne, was responsible for managing the fund. In May 2024, Falcon Capital suspended applications and withdrawals, preventing most investors from accessing their superannuation or transferring funds to a new superannuation provider.Also read: The $100-a-week super habit that could save Aussie business owners from a $500,000 retirement shockFinancial advisers directed superannuation transfers into risky schemeMany investors were guided by financial advisers to transfer their superannuation from established funds such as ANZ into First Guardian via retail choice super funds. Forklift driver Juan Carlos Sanchez reported being promised up to $1 million in retirement savings by telemarketers working for financial advisory firm Venture Egg.“They were talking numbers of – ‘we’ll have you $800,000 in your super by the time you retire; a million dollars’, really crazy things like that,” Mr. Sanchez told the ABC.Live EventsMr. Sanchez received an email in May, 2024 from the AusPrac fund confirming that withdrawals had been frozen.“When I got that email, my stomach dropped, it’s just been wiped out by this collapse,” he said. “I just had this sick feeling.”ASIC alleges investor funds were not reinvested for growth but redirected into a cash hub controlled by First Guardian directors. Mr. Sanchez and thousands of other investors are now unable to access their superannuation balances.Also read: Superannuation changes explained: Why 80,000 retired and super-rich Aussies will pay more taxASIC investigates fund misuse and offshore transfersASIC alleges Falcon Capital director David Anderson funneled millions from First Guardian investors into his own business interests, including failed property developments and craft breweries. He was also reportedly a shareholder in ventures involving celebrity chef Scott Pickett.“First Guardian has invested in entities which Mr. Anderson had an association with or financial interest in and Falcon appears to have failed to recognise and manage consequent conflicts of interest,” ASIC stated.In April, 2024, the Federal Court appointed FTI Consulting as Falcon Capital’s liquidators following an ASIC application. Anderson’s assets were frozen, and his passport seized. Along with Falcon director Simon Selimaj, Anderson is barred from leaving Australia until February, 2026.Public court documents allege Anderson transferred $274 million to offshore companies tied to him after receiving notice of the investigation. ASIC also identified $5.6 million deposited into Anderson’s personal ANZ account without clear justification. Among these transactions was a $16,000 mortgage payment on Anderson’s multimillion-dollar home.In its filings, ASIC claimed Falcon continued to reinvest limited funds into illiquid assets, despite previously indicating that it would prioritize investor redemptions once receivables were recovered. In a best-case scenario, regulators estimate $81 million remains unaccounted for.Also read: Trillions wiped from the economy and Americans’ pensions as stock markets tank following Donald Trump’s taFinancial adviser and marketing payments under regulator scrutinyASIC is also investigating Melbourne-based financial adviser Ferras Merhi, head of Venture Egg Financial Services. Merhi is connected to 2,440 clients who collectively invested $179 million into the First Guardian Master Fund. The Federal Court has issued interim orders freezing select assets belonging to Merhi.Court documents allege Merhi received over $19 million in payments from First Guardian for marketing services while directing clients into the same fund. ASIC further alleges that $23 million in fund assets were disbursed for marketing purposes, contradicting representations made to investors.“Everyone is running for the hills trying to cover their backsides. It’s absolutely shameful,” said investor Greg McElherron. “If you’re going to be not only encouraged but mandated to put money into your super, it should be protected.”Investors used reputable super platforms before collapseInvestors accessed the First Guardian Master Fund through well-known superannuation platforms, including Diversa, Netwealth, and Equity Trustees. They were advised to roll their superannuation balances into retail super funds or self-managed superannuation funds before transferring into First Guardian.David Anderson’s attorney, Dan Mackay, stated, “There have been no findings of fact or law by any court or tribunal, nor by ASIC. Mr. Anderson will fully exercise his rights in response to allegations which may be made against him at the appropriate time in the appropriate forum.”Also read: How will Trump tariffs affect retirement and 401Ks?ASIC’s investigation into First Guardian Master Fund, Falcon Capital, and associated individuals remains ongoing.FAQs about the First Guardian Master Fund collapse1. What is the First Guardian Master Fund and why did it collapse?The First Guardian Master Fund was a managed investment scheme that received $590 million from over 6,000 Australians through superannuation transfers. It collapsed in early 2024 following ASIC’s investigation into alleged misuse of investor funds, conflicts of interest, and failure to manage investments appropriately.2. Can superannuation investors recover their money from the First Guardian collapse?Recovery of superannuation funds from the First Guardian Master Fund remains uncertain. ASIC’s best-case scenario analysis found $81 million unaccounted for. With much of the money allegedly moved offshore or invested in illiquid assets, full recovery appears unlikely for many investors.3. Who is being investigated in connection with the First Guardian collapse?ASIC is investigating Falcon Capital directors David Anderson and Simon Selimaj, as well as financial adviser Ferras Merhi of Venture Egg Financial Services. Allegations include diversion of superannuation funds, offshore transfers, personal benefit payments, and undisclosed marketing commissions.4. How were investors directed to invest in the First Guardian Master Fund?Investors accessed the First Guardian Master Fund via trusted super platforms like Diversa, Netwealth, and Equity Trustees. Financial advisers, including those from Venture Egg, encouraged clients to roll their superannuation into retail or self-managed super funds before investing in the scheme.(You can now subscribe to our Economic Times WhatsApp channel)
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