The Australian Securities & Investments Commission has sought leave from the Federal Court to expand its existing proceeding against former financial adviser Ferras Merhi, alleging unconscionable conduct, conflicted advice, failures to act in clients’ best interests and defective statements of advice in connection with advice to invest superannuation into the First Guardian Master Fund and Shield Master Fund. ASIC alleges that, between 2020 and 2024, Mr Merhi and advisers working for him recommended clients invest around AUD 296 million of superannuation into First Guardian and around AUD 230 million into Shield, while his businesses received nearly AUD 18 million in upfront advice fees and more than AUD 19 million from entities associated with First Guardian for marketing. The conduct is alleged to have involved using marketing companies to funnel prospective clients to his advice businesses, Venture Egg and Financial Services Group Australia (in liquidation), and providing statements of advice that implied Shield was operated by Macquarie and that he had no vested interest in the recommended funds, despite involvement in marketing and related payments. Both funds have collapsed, leaving thousands of clients’ superannuation at risk. The application is subject to the Court’s approval and, if granted, ASIC will seek injunctions barring Mr Merhi from involvement in a financial services business, the appointment of a receiver over his personal property, and provisional liquidators for Venture Egg Financial Services and United Financial Advice. Interim freezing orders over Mr Merhi’s property and travel restraint orders remain in place until 12 December 2025, ASIC’s investigations continue, and ASIC noted that in cancelling FSGA’s licence (effective 7 June 2025) it required FSGA to remain an Australian Financial Complaints Authority member until 4 June 2026.
Australian Securities & Investments Commission 2025-08-29
Australian Securities & Investments Commission asks Federal Court to add unconscionable conduct and conflicted advice claims against Ferras Merhi over First Guardian and Shield superannuation investments
The Australian Securities & Investments Commission (ASIC) seeks Federal Court approval to expand its case against former financial adviser Ferras Merhi for alleged unconscionable conduct and conflicted advice on superannuation investments. ASIC claims Merhi's businesses received substantial fees while misleading clients. If approved, ASIC aims to bar Merhi from financial services, appoint a receiver over his assets, and impose provisional liquidators on his companies, with interim orders until December 2025.