Following applications made by the Australian Securities and Investments Commission (ASIC), the Federal Court has made interim orders freezing certain assets of Melbourne-based financial adviser Ferras Merhi and Osama Saad, former director of Aus Super Compare Pty Ltd (in liquidation) and Atlas Marketing Pty Ltd (in liquidation).
“ASIC is investigating Mr Merhi and various entities associated with him, in connection with its investigations concerning certain managed investment schemes including the Shield Master Fund. These investigations are ongoing,” ASIC said, adding in a separate announcement that the same is true of Saad.
The interim orders relating to both Merhi and Saad are in place until 7pm AEDT on 4 April 2025, with a final hearing to decide whether the orders should continue has been scheduled for 4 April 2025.
Merhi controls Venture Egg Financial Services Pty Ltd and United Financial Advice Pty Ltd, trading as Venture Egg and Financial Services Group Australia Pty Ltd (FSGA).
Both Venture Egg and Merhi are authorised representatives of licensee InterPrac Financial Planning Pty Ltd. FSGA also holds an Australian Financial Services Licence (AFSL).
Saad was a director of Aus Super Compare until September 2024 and the sole director of Atlas until November 2024. Both entities were placed into liquidation in late 2024.
In February 2024, ASIC halted new offers of investments in Shield Master Fund, of which Keystone Asset Management (KAM) is the responsible entity, and made interim stop orders on four product disclosure statements for Shield.
In June 2024, ASIC took action to secure the assets held within Shield. ASIC sought the appointment of Jason Tracy and Lucica Palaghia of Deloitte as receivers and managers of the property of KAM.
In December 2024, ASIC noted that the creditors of Keystone had resolved to wind up KAM and appoint Jason Tracy and Glen Kanevsky of Deloitte as joint and several liquidators.
“ASIC understands that, since February 2022, funds totalling more than $480 million have been invested into Shield by at least 5,800 consumers, who accessed Shield primarily through superannuation platforms, the trustees for which were Macquarie Investment Management Limited and Equity Trustees Superannuation Limited,” the regulator said in December.
“The investigation to date suggests that potential investors were called by lead generators and referred to personal financial advice providers who advised investors to roll their superannuation assets into a retail choice superannuation fund and then to invest part or all of their superannuation into Shield.”
As a result of this, ASIC said its investigation of the circumstances surrounding Shield include KAM and its directors and officers, the role of the superannuation trustees, the financial advisers who recommended investors invest in Shield, the lead generators, and others.
“It has come to ASIC’s attention that Venture Egg (a financial adviser who has advised clients to invest in Shield) has issued letters to investors dated 29 November 2024 and 2 December 2024,” ASIC added at the time.
“ASIC is concerned that the information in the letters is incomplete and some of the statements in the letters are inaccurate.”
In October, ASIC cancelled the AFSL of Queensland-based Next Generation Advice, which is in liquidation and had recommended investments that included the Global Capital Property Fund and the Shield Master Fund.
Earlier this month, ASIC commissioner Alan Kirkland said the regulator is continuing to see too many examples where advice leads to poor, if not devastating, outcomes for consumers.
“Our ongoing investigation into the Shield Master Fund is one such example, though regrettably it’s not an isolated one. It reflects a pattern of conduct we are seeing all too frequently,” Kirkland said.
“This pattern commonly involves telemarketers recruiting consumers before passing them onto advisers. These advisers then recommend that consumers withdraw their superannuation savings from a regulated fund and invest them, sometimes via an SMSF, into a high-risk property scheme or some other high-risk investment.”
ASIC the watchdog clearly was asleep and needs to be held accountable with the super trustees! 5,800 individuals that got their super destroyed whilst this went unchecked. Alarm bells should have gone off when half a billion dollars got moved into a fund that’s not even 2 years old! ASIC gots lots to explain to citizens. This regulator is a failure! The government should question the effectiveness of a regulator if such big disasters occurs under the regulators nose! 5,800 individuals that will now become dependent on the government for retirement pension.
I don’t think they were asleep the blame lies with the fraudgelant behaviour which will be proved by Keystone, Venture Egg and Aus Super Compare plus others. Keystone stole investor funds and channeled it into risky investments that were not disclosed in their PDS’s and the lead generators were a party to this receiving fees for issuing dodgy advice and in turn providing customers to registered advisors. It has nothing to do with ASIC. The blame does not lie with them. It lies with criminals and the fraudgelant behaviour.
Just wait for the next CLSR levy for the poor advisers who’ve done nothing wrong.