ASIC files avalanche of lawsuits over super switching scheme
In reality, Shield and First Guardian charged higher than normal fees and, instead of investing in shares and real estate like other super funds, used the $1 billion invested in them to fund extravagant pet projects of the scheme operators, who are also under investigation by ASIC.
ASIC Deputy Chief Executive Sarah Court said Interprac’s alleged oversight and compliance failures exposed thousands of Australians to inadequate advice and serious financial risk.
“We argue that no competent financial advisor could have advised Australians to invest a large proportion of their pensions into these funds and that Interprac, as a licensee, should have been mindful and sensitive to the serious risk this behavior posed to clients, but failed on many levels,” Court said.
SQM Research, led by respected real estate commentator Louis Christopher, is being sued by the watchdog in a separate case It was announced on Wednesday.
ASIC alleges that SQM breached its obligations when it gave Shield Master Fund a positive rating as part of a commercial agreement. The regulator alleges that the research firm did this even though it failed to obtain the information needed to make the assessment, failed to properly consider inconsistencies in the information it received, and misrepresented other information.
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In a statement, SQM said: “We are currently assessing ASIC’s claim and will explain our position in due course.”
The court said the civil penalty case against SQM was the first time the regulator had taken action against a research centre.
“We believe research houses are important watchdogs and form part of a critical line of defense against poor quality investments or unsuitable products,” Court said.
Third action announced by ASIC On Wednesday he targeted Melbourne financial planning group MWL Financial and its director Nicholas Maikousis. Resigns as chairman of respected National Premier League team South Melbourne Football Club.
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A company associated with the Shield Master Fund was the main sponsor of South Melbourne until 2024, and a senior staff member of MWL Financial was a board member of the fund.
MWL is accused of advising 556 clients to put nearly $114 million of their superannuation into Shield, while failing to ensure the advice was appropriate and conflicts of interest were managed.
The court heard MWL appointed administrators in late September and as a result ASIC sought court permission to bring the case.
Leading producer Imperial Capital Group, which worked with MWL to recruit clients for the two funds, was also prosecuted by ASIC as part of the MWL case.
ASIC alleges the Gold Coast-based group raked in nearly $13 million from the fund to assist with referrals. MWL has been contacted for comment; This imprint was unable to contact Imperial, which closed its website in March 2024.
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