The Australian Securities & Investments Commission has started Federal Court proceedings against three former directors of Keystone Asset Management Ltd and two former compliance committee members, alleging they exposed investors’ superannuation savings to significant risk through conflicted and inadequately controlled transactions in the Shield Master Fund. ASIC alleges more than AUD 530 million from about 5,800 investors flowed into Shield, a managed investment scheme operated by Keystone, and that about AUD 305 million was transferred to a related property development fund controlled by Keystone before being moved to entities linked to two of the former directors. The case alleges the transfers occurred without basic safeguards such as proper security, valuations, oversight or conflict management. ASIC also alleges investor money was used for unauthorised purposes without a sufficient connection to the intended property development projects, including payments to related parties and third parties without the required prior approval of scheme members, and that the defendants failed to ensure compliance with the Shield compliance plan, including by not obtaining asset valuations and not managing conflicts involving Paul Chiodo and Ilya Frolov. ASIC is seeking civil penalties, disqualification orders against the former directors and costs. The proceedings form part of ASIC’s wider action on Shield. Earlier measures included stopping new offers of Shield investments in February 2024 and action in June 2024 that preserved nearly AUD 200 million for investors. ASIC said its investigations into matters connected to Shield are continuing, while related recovery and court proceedings by liquidators and against other parties remain ongoing.
Australian Securities & Investments Commission2026-06-26
Australian Securities & Investments Commission sues former Keystone directors and compliance committee members over alleged misuse of AUD 530 million in Shield superannuation funds
The Australian Securities & Investments Commission has sued former Keystone Asset Management directors and compliance committee members, alleging they put Shield Master Fund investors’ superannuation at risk by transferring fund money to related entities and third parties without proper safeguards. ASIC says more than AUD 530 million entered the fund and about AUD 305 million was moved through a related property vehicle into entities linked to two former directors. It is seeking civil penalties, disqualification orders and costs, and said its Shield investigation is continuing.