Speaking on a Financial Advice Association Australia (FAAA) webinar on Thursday, chief executive Sarah Abood said she was pleased to see the Australian Securities and Investments Commission’s (ASIC) expansive efforts across the range of sectors involved in the Shield and First Guardian collapses.
“There was news on Monday, obviously, that ASIC is taking action against Diversa, which is one of the super platforms that’s involved in this,” Abood said.
“They had investments in First Guardian. That number is pretty big, $300 million is what ASIC have included in their civil proceedings. What they’re alleging is a failure of due diligence and ongoing monitoring. In this case, specifically, that a 50 per cent client limit on the funds wasn’t enforced by Diversa. We understand that will be contested.
“The other element of the compensation is that ASIC are seeking client compensation orders, in this case, which we’re very happy to see, and would like to see that happen even more often with the actions that ASIC takes, because that means that anything that they win can go to the consumers who need that compensation, rather than those proceeds going into consolidated revenue for government.”
She also noted that given this has taken the number of current actions to 11 against 19 individuals and entities, there is no doubt that ASIC is “hard against a wide range of parties”.
“One that we haven’t heard about yet, and I’m not sure what the status is, is the auditors,” Abood said.
“When ASIC has spoken on many occasions about the ecosystem that’s involved here, they’re very clear that there’s not just one or two sectors that have failed. There’s a wide number of gatekeepers and entities that have failed as part of Shield and First Guardian, and the layer that hasn’t been actioned yet, at least not so far as I’m aware is the auditors of the funds.”
The CEO added that while the First Guardian, Auditeo, is in liquidation and there may not be “much value in taking action against them”, however the firm’s website currently states that it is now Nova Audit Group.
There is not currently a website available for this new firm, which was registered with a new ABN on 27 August 2025.
Shield’s auditor, on the other hand, was global accounting and auditing firm BDO.
“We haven’t heard publicly yet what ASIC’s intentions there are. We will ask,” Abood said.
ifa reported in August that despite Keystone Asset Management, the responsible entity for Shield, coming under fire over allegations of related party loans to other entities that its directors controlled, BDO didn’t raise any issues with its compliance until 28 June 2024.
In its first compliance plan audit report, seen by ifa, covering the year to 30 June 2021, which it delivered on 27 October that year, BDO found Keystone had complied with its plan, though it had only registered Shield in May 2021.
Another report for the following financial year, which featured identical wording outside the dates, likewise found no concerns.
The FY2022–23 Shield compliance plan audit, however, raised myriad concerns over the directors’ actions, including a failure to provide BDO with “access to information that we require to form our opinion”.
This included the company’s books and records, as well as information on “related party transactions/balances, legal advice and corporate documentation”.
“The responsible entity have not met the requirements of their compliance plan in numerous instances during the year ended 30 June 2023, including, the financial reporting and lodgement obligations of itself as responsible entity or the scheme it manages for the year ended 30 June 2023 (and half years ended 31 December 2022 and 2023 for the scheme),” the report said.
BDO added that the directors had not been able to demonstrate they met disclosure requirements for product disclosure statements “as they relate to investment management and related parties disclosure, unit pricing errors, delays in the reporting of a breach and the remediation of a duplicate payment”.
It also lays out that the measures within the compliance plan are not adequate, though there is no mention of whether the plan had changed from that of prior years when BDO found it appropriate.
While this report was for the year ended 30 June 2023, BDO completed the report on 28 June 2024 – months after ASIC had issued interim stop orders, 10 days after the Federal Court froze Keystone’s assets, and two days after it had appointed Deloitte to report on Keystone’s financial position.
ifa approached BDO for comment at the time, however, the firm said it is unable to comment on client matters.
