Macquarie Investment Management Ltd (MIML) has committed to paying thousands of Australians who invested hundreds of millions in retirement savings in the Shield Master Fund (Shield) and has admitted it contravened the Corporations Act.
ASIC has commenced proceedings in the Federal Court against MIML following admissions that it did not act efficiently, honestly and fairly by failing to place Shield on a watch list for heightened monitoring. ASIC has also accepted a court-enforceable undertaking from MIML to ensure Macquarie pays to members 100% of the amounts they invested in Shield less any amounts withdrawn.
ASIC Deputy Chair Sarah Court said, 'This is an important outcome that stems the significant losses that threatened thousands of members' retirement savings after they used Macquarie's platform to invest their super in Shield.
'Many members thought their funds were safe when they used Macquarie's super platform to invest in Shield, which had no track record.
'ASIC's investigation will see Macquarie return these members to the position they were in before their retirement savings were eroded.'
As superannuation trustee, MIML oversaw approximately $321 million in super investments into Shield by around 3,000 of its members between 2022 and 2023.
Macquarie has admitted the allegations in the proceeding. It is a matter for the Court to determine whether the declarations are appropriate.
ASIC has determined not to seek the imposition of a civil penalty in the exceptional circumstances of this matter, including:
- the strong public interest in obtaining a timely court-based outcome which will encourage other superannuation trustees to comply with their legal obligations in the context of choice platforms;
- the interests of providing affected members who invested into Shield through a regulated superannuation fund with certainty in a timely manner; and
- the level of cooperation demonstrated by Macquarie in agreeing to pay members 100% of the amounts invested in Shield less any amounts withdrawn, without waiting for an outcome of the Shield liquidation or proceedings against other parties involved.
'Superannuation trustees offering choice platforms are on notice. They are gatekeepers for retirement savings. ASIC expects them to take active steps to monitor the funds they make available to members through their platforms,' the Deputy Chair said.
'ASIC is continuing to investigate misconduct relating to the Shield and First Guardian Master Funds to hold those involved to account.'
Background
MIML is a subsidiary of Macquarie Group Ltd.
MIML is the superannuation trustee of the Macquarie Superannuation Plan and operates the Macquarie wrap platform.
MIML is co-regulated by APRA. ASIC and APRA have coordinated closely in relation to this matter consistent with the collaborative approach each agency takes in relation to issues of shared regulatory interest.
In February 2024, ASIC halted new offers of investments in Shield. ASIC made interim stop orders on four product disclosure statements for Shield (24-018MR).
Macquarie Super members who invested in Shield have not been able to redeem their funds since February 2024 after Keystone (the responsible entity of Shield) froze redemptions.
In June 2024, ASIC took action to secure the assets held within Shield (24-129MR). ASIC sought orders to preserve the assets of the scheme so that they may be recovered, to the extent available, for the benefit of investors while the investigation is continuing. ASIC understands that, since February 2022, funds totalling more than $480 million have been invested in Shield by at least 5,800 consumers, who accessed Shield primarily through superannuation platforms, the trustees for which were Macquarie Investment Management Limited and Equity Trustees.
The investigation to date suggests that potential investors were typically called by lead generators and referred to personal financial advice providers who advised investors to roll their superannuation assets into a retail superannuation fund available on a choice platform and then to invest part or all of their superannuation into Shield.
ASIC is investigating the circumstances surrounding Shield. ASIC is investigating Keystone Asset Management Ltd (in liquidation) (the responsible entity for Shield), its directors and officers, the role of the superannuation trustees, certain financial advisers who recommended investors invest in Shield, the lead generators, and the research house which rated Shield.
This action follows proceedings ASIC launched in the Federal Court against Equity Trustees Superannuation Limited (Equity Trustees) in August (25-176MR). That matter is continuing through the legal process.
