ASIC has sought leave from the Federal Court to expand its existing proceeding against former financial adviser Ferras Merhi to allege he engaged in unconscionable conduct, failed to act in the best interests of clients, gave conflicted advice, and provided defective statements of advice whilst receiving millions of dollars.
ASIC will seek to allege Mr Merhi used marketing companies to push potential clients to his financial advice businesses, Venture Egg and Financial Services Group Australia (FSGA) (in liquidation).
Between 2020 and 2024, Mr Merhi and advisers working for him allegedly advised clients to invest around $296 million of their superannuation into the First Guardian Master Fund (First Guardian) and around $230 million into the Shield Master Fund (Shield).
In return, ASIC alleges Mr Merhi's businesses received:
- nearly $18 million in upfront advice fees; and
- more than $19 million from entities associated with First Guardian for marketing First Guardian to clients.
Both funds have now collapsed, leaving thousands of clients' superannuation at risk.
ASIC Deputy Chair Sarah Court said this action is the latest part of ongoing enforcement activity to clamp down on misconduct we consider exploits superannuation savings.
'This type of conduct doesn't just undermine the integrity of the financial advice and superannuation industries, it can have a devastating impact on people's lives,' the Deputy Chair said.
ASIC will also seek to allege Mr Merhi, Venture Egg Financial Services Pty Ltd and United Financial Advice Pty Ltd breached numerous financial adviser obligations which are aimed at protecting clients, and that their conduct and business model were unconscionable.
ASIC will seek to allege Mr Merhi provided clients with statements of advice which contained false or misleading statements about the nature of the Shield Master Fund by implying it was operated by Macquarie. ASIC will also seek to allege Mr Merhi falsely represented that he had no vested interest in the recommended funds when, in reality, he was involved in marketing both schemes and received tens of millions of dollars for marketing First Guardian.
Clients allegedly were led to believe they were receiving independent, tailored advice. Instead, they were allegedly channelled into pre-determined investment portfolios that were highly risky and served the financial interests of Mr Merhi and his businesses.
ASIC's application to make these allegations is subject to the Court's approval. If the Court gives approval, ASIC will seek injunctions prohibiting Mr Merhi from any involvement in a financial services business, the appointment of a receiver to Mr Merhi's personal property, and provisional liquidators to Venture Egg Financial Services and United Financial Advice.
Background
ASIC will seek to allege that Mr Merhi, Venture Egg Financial Services Pty Ltd and United Financial Advice Pty Ltd contravened:
- s12CB of the ASIC Act - engaging in conduct in connection with the supply or possible supply of financial services, which was in all the circumstances unconscionable
- s952E of the Corporations Act - providing defective disclosure documents
- s961B of the Corporations Act - failure to act in their client's best interests
- s961G of the Corporations Act - advice must be appropriate to the client, and
- s961J of the Corporations Act - conflict between client's interests and the advice provider.
ASIC will also seek to allege that FSGA contravened s 961L by failing to ensure that its representatives complied with best interest obligations.
In February 2025, the Court made interim freezing orders over Mr Merhi's property. These orders remain in place until 12 December 2025 (25-024MR).
ASIC cancelled the AFSL of FSGA, effective 7 June 2025 and permanently banned its responsible manager (25-102MR).
In July 2025, the Court made travel restraint orders against Mr Merhi. Those orders prevent him from leaving or attempting to leave Australia until 12 December 2025, or until further order of the Court (25-024MR).
ASIC has taken a number of actions to freeze assets and restrain travel of individuals associated with ASIC's investigations into the circumstances surrounding Shield and First Guardian.
ASIC's investigations into the matters connected to Shield and First Guardian are continuing.
Consumer information
ASIC has issued a consumer alert warning amid increasing concerns that people are being enticed to invest their retirement savings into complex and risky schemes: 25-120MR Consumer alert. Be super smart, visit ASIC's Moneysmart campaign page.
Stay Updated: ASIC will post important updates about on its dedicated webpages: Shield Master Fund and the First Guardian Master Fund.
Actions to consider if you are a client of Mr Merhi, Venture Egg or FSGA
If you are a client of Mr Merhi, Venture Egg or FSGA and have concerns about the conduct of your adviser or the advice you received, you should consider lodging a complaint with the Australian Financial Complaints Authority (AFCA).
AFCA is the external dispute resolution scheme for financial complaints in Australia and must deal with complaints independently and fairly. AFCA's service is free for consumers.
AFCA can be contacted by:
- calling 1800 931 678 for free (9am - 5pm Melbourne time), or
- lodging a complaint online on AFCA's website.
AFCA will consider your complaint if it meets the eligibility criteria.
Important deadline: In cancelling FSGA's licence, ASIC required FSGA to remain a member of AFCA until 4 June 2026. If you intend to lodge a complaint with AFCA in relation to advice received from FSGA you should do so by 4 June 2026.
