Sequoia denies any ‘undisclosed information’, but further trading concerns emerge

Sequoia responded to the ASX’s trading queries on Wednesday morning, telling the exchange the company is “not aware of any information that could explain the recent trading in its securities”.

Trading in the firm on Monday had seen a massive drop in its price, falling around 30 per cent from $0.34 to $0.24, which led to the halt being issued on Tuesday morning.

However, share purchases from the middle of 2024 have hit the headlines, with The Australian reporting that advice firms under Ferras Merhi’s licensee, Financial Services Group Australia (FSGA), had invested more than 100 clients into Sequoia.

Merhi and his advice firm, Venture Egg Financial Services, were both authorised representatives of Sequoia subsidiary InterPrac Financial Planning, though InterPrac has since ceased the authorisations.

According to The Australian, more than 575,000 shares were purchased by advisers operating under FSGA between 28 June and 1 July 2024 at a cost of $273,500.

There is no suggestion that Sequoia or InterPrac were aware of the FSGA clients’ investments in the firm.

Also in its response to the ASX, Sequoia said that while it has no “material undisclosed information”, the masthead’s reporting on Shield funds potentially being involved in New Quantum’s acquisition of Morrison Securities from Sequoia could be to blame for the drop in price.

“The company is cooperating with ASIC which is investigating the failure of the Shield Master Fund and First Guardian Master Fund and their responsible entities. Details of the investigations were provided in the announcement to market dated 7 April 2025 and the directors of SEQ confirm there is nothing further to announce at this time,” it added.

In a statement to ifa, Sequoia stressed that the company was “not involved in the loan arrangement between Keystone and New Quantum”.

“Sequoia sold Morrisons Securities to New Quantum on standard commercial terms. How New Quantum funded the acquisition was its own responsibility, and not something Sequoia had visibility over,” the company said.

“It is important to clarify that the owner of New Quantum – who facilitated the Keystone loan – is the same entity that operated the superannuation platform which accepted member funds into the Shield Fund.

“The relevant connection to the Shield Fund lies with that platform and its trustees, not with Sequoia. Sequoia and InterPrac were not involved in the Keystone loan arrangement, product approvals or investment decisions within the New Quantum superannuation platform.”

It also followed some substantial holders of Sequoia reducing their stake in the firm.

Acorn Capital disclosed on 13 June that it was no longer a substantial holder following a series of trades since April, while the Australian Wealth Advisors Group (AWAG), which had only bought a significant chunk of Sequoia in February this year, also sold off part of its holding.

On 15 July, AWAG disclosed that it had reduced its ownership stake in Sequoia from 18 per cent to slightly above 15 per cent.

While AWAG did not wish to comment on its individual trading decisions, a spokesperson for the firm told ifa that there are “challenges ahead” for Sequoia.

In early trading on Wednesday morning, Sequoia's shares dropped further to $0.225.