The Australian Securities & Investments Commission has commenced civil penalty proceedings in the Federal Court against Interprac Financial Planning Pty Ltd, alleging licensee oversight and compliance failures that allowed its former authorised representatives to advise clients to invest in the Shield Master Fund and First Guardian Master Fund. ASIC alleges around 6,843 clients invested about AUD 677 million of superannuation into the two funds, which have since collapsed. ASIC alleges Interprac failed to ensure the representatives complied with best interests obligations and did not maintain adequate risk management systems. The claimed failures include an inadequate approved product list process that relied entirely on external research, insufficient responses to the use of lead generators (Imperial Capital Group Australia Pty Ltd and AGAT Business Pty Ltd, in liquidation), inadequate action after reports of payments to Ferras Merhi’s companies by entities associated with the funds, and not enforcing or maintaining a hold on new investments after Interprac’s managing director acknowledged serious issues. ASIC also points to a ‘negative consent’ practice leading to some investments without express client consent, inadequate responses to significant inflows and client complaints (including reliance on template responses), and a failure to impose meaningful consequences for repeated compliance issues identified in audits. ASIC is seeking declarations, civil penalties and orders restraining Interprac from carrying on a financial services business. It noted that Venture Egg and Ferras Merhi ceased being authorised representatives of Interprac from 31 May 2025, and Rhys Reilly and Rhys Reilly Pty Ltd from 15 August 2025, and that separate proceedings against Merhi are underway, including interim Federal Court orders restraining him from operating in the financial services industry.

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