ASIC has launched civil penalty proceedings against Equity Trustees, alleging the superannuation trustee failed to exercise appropriate care, skill and diligence when allowing members to invest in the First Guardian Master Fund.
ASIC said more than $65 million was invested into First Guardian between June 2023 and March 2024 by around 2,700 members of NQ Super & Pension, a division of the AMG Superannuation Fund for which Equity Trustees acted as trustee.
According to the regulator, Equity Trustees allegedly failed to obtain critical information before onboarding First Guardian, including its constitution, audited financial accounts and an audit of its compliance plan.
ASIC further alleged the trustee allowed members to invest 100 per cent of their superannuation balances into First Guardian despite evidence the fund was, or may have been, illiquid.
The corporate regulator is seeking compensation for affected members, alongside declarations and civil penalties.
ASIC deputy chair, Sarah Court, said the proceedings formed part of the regulator’s broader enforcement action into the collapse of First Guardian and related funds.
“We allege that a prudent superannuation trustee in Equity Trustees’ position would not have approved the First Guardian classes as investment options based on the information it had available.”
“Superannuation trustees play a critical role helping their members save for retirement, but we allege Equity Trustees failed to put the interests of their members first,” Court said.
ASIC alleged Equity Trustees failed to exercise the same degree of care, skill and diligence expected of a prudent superannuation trustee when onboarding the different First Guardian investment classes.
The regulator also claimed the trustee failed to act in members’ best financial interests and did not ensure the financial services covered by its Australian financial services licence were provided efficiently, honestly and fairly.
Court said the latest proceedings marked ASIC’s second action against Equity Trustees and the fifth against a super trustee connected to the First Guardian and Shield Master Fund investigations.
“ASIC has now commenced proceedings against every super trustee that made available Shield or First Guardian. More than $420 million has been repaid to thousands of investors through ASIC’s work to date. We currently have more than 26 matters under investigation or before the Federal Court and we expect further action to follow,” Court said.
Equity Trustees, a subsidiary of EQT Holdings Limited, approved three First Guardian investment options — Defensive, Diversified and Growth — on the NQ Super platform.
The trustee is an Australian financial services licensee and registrable superannuation entity licensee overseeing 14 APRA-registered superannuation funds.
ASIC also has separate ongoing civil penalty proceedings against Equity Trustees relating to the onboarding and ongoing monitoring of the Shield Master Fund.
