The Australian Securities and Investments Commission (ASIC) has commenced civil penalty proceedings in the Federal Court against Diversa Trustees Limited, alleging failures concerning the First Guardian Master Fund.
According to ASIC, around $300 million was invested into First Guardian from 2020 to 2024 through superannuation funds for which Diversa was trustee.
In the filing, ASIC alleged that Diversa had failed to conduct “adequate due diligence before allowing its members to invest and failed to conduct adequate ongoing monitoring”.
The regulator also alleged that Diversa failed to enforce a 50 per cent holding limit that it had imposed for First Guardian and failed to have systems and processes in place to ensure that there was compliance with that holding limit.
“This is another significant action relating to the First Guardian collapse which is an ongoing enforcement priority for 2026,” said ASIC deputy chair Sarah Court.
“Superannuation trustees must put their members first by acting with care and skill and by carrying out proper checks on investment options made available on their platforms.”
ASIC alleges that Diversa failed to:
- exercise the same degree of care, skill and diligence as a prudent; superannuation trustee would;
- act in the best financial interests of its members;
- exercise due diligence in developing, offering and reviewing investment options; and
- do all things necessary to ensure the financial services covered by its Australian financial services licence were provided efficiently, honestly and fairly.
“This action furthers ASIC’s commitment to seek compensation for the victims of the Shield and First Guardian collapses wherever possible,” Court added.
“Our first priority has been preserving assets for the benefit of investors to the extent they are available, and now we’re taking action to hold those we consider responsible to account with 11 cases underway in the Federal Court against 19 defendants.”
ASIC said it is seeking orders for compensation, declarations and civil penalties from the Court.
Diversa is the trustee of a number of APRA regulated superannuation funds and, at different times between July 2020 to July 2024, Diversa was the trustee for the Powerwrap Master Plan, Praemium SMA Superannuation Fund, YourChoice Super and AustralianPractical Superannuation.
YourChoice and AusPrac were sub-plans of the MAP Master Superannuation Plan prior to 1 December 2020. After 1 December 2020, YourChoice and Ausprac became sub-plans of the OneSuper Fund.
In late August, ASIC took action against Equity Trustees, alleging that it failed in its due diligence requirements over the inclusion of the Shield Master Fund on its platform.
“Instead of acting as an effective gatekeeper for its members’ retirement savings, ASIC alleges Equity Trustees allowed thousands of members to invest in Shield which had no track record. Those members ultimately saw their super balances eroded,” Court said at the time.
In October, the corporate regulator sought to expand its proceedings against Equity Trustees to seek compensation from the super fund trustee following Macquarie agreeing to pay members $321 million over its failings related to Shield.
In September, ASIC announced that Macquarie Investment Management Limited (MIML) had committed to paying $321 million to cover the losses of thousands of Australians that invested in Shield through its platform.
ASIC commenced proceedings in the Federal Court against MIML following admissions that it did not act “efficiently, honestly and fairly by failing to place Shield on a watchlist for heightened monitoring”.
The regulator has also accepted a court-enforceable undertaking from Macquarie to ensure it pays members 100 per cent of the amounts they invested in Shield less any amounts withdrawn.
Can the Financial Planning industry sue ASIC for not acting on the warnings before the collapse? Perhaps they can share in some of the CSLR fees being gauged out of innocent advice smb’s.