National law firm investigating potential class action against First Guardian Master Fund and Shield Master Fund after accusations of operating Ponzi scheme as more than $1bn on the line
The national law firm has advised not only are 12,000 Australians expected to be affected by the alleged scheme, but more than $1b is at stake of being lost to the collapsed funds.
Keystone Asset Management, the responsible entity for the Shield Master Fund, and Falcon Capital, the manager of the First Guardian Master Fund, have both entered into liquidation with ASIC understood to be carrying out a range of investigations against all parties involved.
Previously ASIC deputy chair Sarah Court said ASIC's investigations are looking at the entire chain, including conduct of the lead generators, the financial advisers, the superannuation platforms, 'who we think have a real role here', and the research houses that 'listed these funds as investable'.
Slater and Gordon principal lawyer in class actions Andy Wei confirmed the firm is investigating claims that investors were advised to roll their superannuation assets into largely unreliable funds, which has now caused great uncertainty amongst investors on how much of their funds would be recoverable.
'What we're seeing here is potentially deliberate misleading of investors, many of whom are everyday Australians looking to secure their nest eggs,' Mr Wei said.
'They were repeatedly assured that their superannuation would flow into diversified portfolios with steady returns.'
He said despite this assurance, 'recent information shows that these funds were largely illiquid with their values grossly overstated.'
Mr Wei added illiquid assets such as real estate, retirement accounts, collectibles and private equity could be harder to recover without 'significant loss of value'.
He affirmed there is a chance that more than 12,000 Australians could be left out of pocket, with more than $1bn in superannuation 'potentially wiped out'.
'These are people's savings, and they deserve far better than this,' he said.
'Superannuation is meant to be tightly regulated, and many investors likely believed their money was safely managed by trusted, blue-chip superannuation companies.'
A Slater and Gordon spokesman highlighted conduct issues at First Guardian 'observed' by FTI Consulting liquidators and accused the superfund of operating a Ponzi scheme with thousands of Australian's superannuation.
'Slater and Gordon understand that the liquidators of First Guardian have observed issues arising from co-mingling of investor funds, such that investors' monies were mixed up and used to pay for other investors' redemptions, or investment commitments and management fees, when ordinarily those redemptions, commitments, and fees should have come from income generated through investment activities,' they told NewsWire.
'Conduct of this kind is common to that seen in Ponzi schemes, and how this was allowed to occur forms a part of our investigation.'
Mr Wei has urged investors who have been affected to come forward and contact the firm to help shaped the best path forward for recovery of their funds.
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