Thousands of Australians are at risk of losing their retirement savings following the collapse of the First Guardian Master Fund, a superannuation investment vehicle that has left around $590 million in limbo.
This unfolding financial disaster has affected roughly 6,000 investors, raising questions about the oversight of retirement funds in Australia and prompting an investigation by the Australian Securities and Investments Commission (ASIC).
Founded in 2019, the First Guardian Master Fund was designed as a management investment scheme and made available to investors through well-known superannuation platforms such as Equity Trustees, Netwealth, and Diversa. However, many investors were unaware that their funds had been transferred to the faltering scheme.
According to reports, one of the affected investors, Juan Carlos Sanchez, a 41-year-old Melbourne business owner, had his superannuation moved from ANZ to the Austrac Fund.
Sanchez claims that he was promised substantial growth for his superannuation, only to discover that his withdrawals had been frozen, with his funds ultimately misdirected to the First Guardian Master Fund.
Allegations of Mismanagement and Fraud
The collapse of the fund has triggered a wide-ranging investigation by ASIC, with a focus on Falcon Capital Limited, the company behind the superannuation scheme.
According to ABC News, ASIC is investigating Falcon’s former managing director, David Anderson, for allegedly misappropriating funds to support his failed property developments and investments in ventures such as celebrity chef Scott Pickett’s restaurant empire.
ASIC’s concerns have intensified following revelations that Anderson may have transferred as much as $274 million to offshore accounts before the corporate watchdog began its probe.
The commission’s investigation has also highlighted the questionable use of investor funds, such as $5.6 million allegedly deposited into Anderson’s personal bank accounts. The situation has left investors uncertain about whether they will ever see their money again, with some estimates suggesting that as much as $81 million is unaccounted for.
Investigations Expand to Financial Advisers
In addition to investigating David Anderson, ASIC is also scrutinising the actions of Ferras Merhi, a Melbourne-based financial adviser linked to Venture Egg Financial Services.
According to court documents, Merhi allegedly played a role in encouraging thousands of clients to transfer their superannuation into the First Guardian Master Fund and Shield Master Fund.
Merhi is said to have received $19 million in marketing fees from the collapsed fund. ASIC has already moved to freeze some of Merhi’s assets, and it is examining whether his actions breached financial advisory standards.
