Thousands
of Australian investors stand to lose up to $274 million of their retirement
savings as financial regulators move to shut down what they describe as a
deeply troubled investment operation.
The
Australian Securities and Investments Commission (ASIC) has applied to the
Federal Court to liquidate Falcon Capital Limited and wind up its flagship
First Guardian Master Fund, escalating the months-long investigation into the
fund’s activities.
Australian Investors Face
$274 Million Loss
The First
Guardian Master Fund, which marketed itself as achieving “sustainable
growth in the Asia Pacific region” through “responsible capital
growth” and “sound risk management,” now faces allegations of
misrepresentation, conflicts of interest, and improper use of investor funds.
Falcon
Capital, as the fund’s responsible entity, was tasked with overseeing the
fund’s operations and ensuring regulatory compliance for investment strategies
that included “absolute return investment strategies, multi-asset
portfolios, and strategic asset allocation.”
ASIC is
also seeking the appointment of a receiver to manage the personal property of
Falcon director David Anderson, according to court documents filed today. This
action builds upon February’s asset freeze affecting Falcon, First Guardian,
and Anderson personally.
ASIC | ASIC Takes Legal Action Against Falcon Capital Limited and First Guardian Master Fund
• ASIC applies to Federal Court for appointment of liquidators to Falcon Capital Limited and First Guardian Master Fund.• Concerns raised about mismanagement and associated risks…
— RegFlow Hub (@RegFlowHub) March 17, 2025
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ASIC Seeks Liquidation of
Falcon Capital
The
regulator’s investigation has uncovered approximately $274 million in overdue
cash receivables within First Guardian’s portfolio, alongside more than $23
million allegedly paid to marketing entities contrary to investor disclosures.
ASIC also alleges potential conflicts of interest involving Anderson’s personal
financial interests in entities receiving fund investments.
“Investors
may have been misled about the security of their investment and likely
returns,” ASIC stated in its filing. The case is scheduled for hearing on
April 9.
The First
Guardian fund has largely suspended withdrawals since May 2024, leaving
investors uncertain about the fate of their capital. Many investors reportedly
entered the fund after being contacted by lead generators who referred them to
financial advisers recommending they roll superannuation assets into retail
choice funds or self-managed superannuation funds (SMSFs) to facilitate First
Guardian investments.
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In earlier
communications, Falcon had indicated plans to transition the fund towards
listed instruments only, moving away from private equity projects. However, by
March 11, Falcon Capital informed investors it was developing a plan for an
“orderly wind down” of First Guardian, acknowledging the regulatory
action against it.
The case
represents another chapter in ASIC’s broader investigation that has already
resulted in asset freezes against financial adviser Ferras Merhi and former
director Osama Saad in February, both allegedly connected to First Guardian’s
operations.
Thousands
of Australian investors stand to lose up to $274 million of their retirement
savings as financial regulators move to shut down what they describe as a
deeply troubled investment operation.
The
Australian Securities and Investments Commission (ASIC) has applied to the
Federal Court to liquidate Falcon Capital Limited and wind up its flagship
First Guardian Master Fund, escalating the months-long investigation into the
fund’s activities.
Australian Investors Face
$274 Million Loss
The First
Guardian Master Fund, which marketed itself as achieving “sustainable
growth in the Asia Pacific region” through “responsible capital
growth” and “sound risk management,” now faces allegations of
misrepresentation, conflicts of interest, and improper use of investor funds.
Falcon
Capital, as the fund’s responsible entity, was tasked with overseeing the
fund’s operations and ensuring regulatory compliance for investment strategies
that included “absolute return investment strategies, multi-asset
portfolios, and strategic asset allocation.”
ASIC is
also seeking the appointment of a receiver to manage the personal property of
Falcon director David Anderson, according to court documents filed today. This
action builds upon February’s asset freeze affecting Falcon, First Guardian,
and Anderson personally.
• ASIC applies to Federal Court for appointment of liquidators to Falcon Capital Limited and First Guardian Master Fund.• Concerns raised about mismanagement and associated risks…
— RegFlow Hub (@RegFlowHub) March 17, 2025
You may
also like this: ASIC
Sues This Company Over Alleged Four-Year Cybersecurity Failures Involving 385
GB of Data
ASIC Seeks Liquidation of
Falcon Capital
The
regulator’s investigation has uncovered approximately $274 million in overdue
cash receivables within First Guardian’s portfolio, alongside more than $23
million allegedly paid to marketing entities contrary to investor disclosures.
ASIC also alleges potential conflicts of interest involving Anderson’s personal
financial interests in entities receiving fund investments.
“Investors
may have been misled about the security of their investment and likely
returns,” ASIC stated in its filing. The case is scheduled for hearing on
April 9.
The First
Guardian fund has largely suspended withdrawals since May 2024, leaving
investors uncertain about the fate of their capital. Many investors reportedly
entered the fund after being contacted by lead generators who referred them to
financial advisers recommending they roll superannuation assets into retail
choice funds or self-managed superannuation funds (SMSFs) to facilitate First
Guardian investments.
Other
readers also liked: ASIC
Charges Former CFDs Industry Executive for Handling Crime Proceeds
Ferras Merhi and Osama
Saad
In earlier
communications, Falcon had indicated plans to transition the fund towards
listed instruments only, moving away from private equity projects. However, by
March 11, Falcon Capital informed investors it was developing a plan for an
“orderly wind down” of First Guardian, acknowledging the regulatory
action against it.
The case
represents another chapter in ASIC’s broader investigation that has already
resulted in asset freezes against financial adviser Ferras Merhi and former
director Osama Saad in February, both allegedly connected to First Guardian’s
operations.
This post is originally published on FINANCEMAGNATES.
