ASIC escalates action over super fund failings

The regulator plans to claim compensation from Equity Trustees after Macquarie’s payout to affected Shield investors.

The corporate regulator wants to expand its proceedings against Equity Trustees to seek compensation from the super fund trustee following Macquarie agreeing to pay members $321 million over its failings related to Shield.

In late August, the Australian Securities and Investments Commission (ASIC) took its first court action against a super fund trustee in relation to the Shield and First Guardian scandals, which put as much as $1.1 billion of member investments at risk.

“Instead of acting as an effective gatekeeper for its members’ retirement savings, ASIC alleges Equity Trustees allowed thousands of members to invest in Shield which had no track record. Those members ultimately saw their super balances eroded,” ASIC deputy chair Sarah Court said at the time.

“Superannuation trustees play a critical role helping people save for their retirement. We expect them to do so with care and skill and put the interests of their members first.

“This action should send a clear message to superannuation trustees: proper due diligence is needed when offering investment options for members.”

On Friday, ASIC disclosed that it has sought to amend the proceeding to “seek compensation from Equity Trustees for losses resulting from the alleged failures by Equity Trustees in making the Shield Master Fund available on its superannuation platforms”.

The regulator’s proposed amendment remains subject to court approval; however, it would enable the lawsuit to go beyond civil penalties and also attempt to reclaim the losses stemming from the $160 million that members invested into Shield through its platforms.

As the trustee for the AMG Superannuation Fund and Super Simplifier, Equity Trustees approved the four classes of Shield as investment options on the NQ Super and Super Simplifier platforms.

In the original filing, ASIC alleged that Equity Trustees failed to exercise the same degree of care, skill, and diligence as a prudent superannuation trustee would, or act in the best financial interests of its members.

The regulator also said the trustees failed to do all things necessary to ensure the financial services covered by its Australian Financial Services Licence were provided efficiently, honestly, and fairly.

Equity Trustees, which is the trustee of 14 APRA-registered superannuation funds with approximately $88 billion in funds under management and around 800,000 members, also approved the inclusion of the First Guardian Master Fund on the NQ Super platform.

In a statement on the ASX responding to the amended filing, Equity Trustees’ parent company, EQT Holdings Limited, said it maintains that member losses were “not due to ETSL’s actions”.

“ETSL maintains that it has acted in accordance with its fiduciary duties and obligations under the Corporations Act and the Superannuation Industry (Supervision) Act,” said Equity Trustees director Mick O’Brien.

“ETSL therefore intends to continue to defend the proceeding, including potentially by seeking court orders that other parties pay compensation to members.

“On 30 September 2025, the total investment in the Shield Master Fund for the two superannuation funds for which ETSL is the trustee was revalued in the fund financial statements from $151 million to $78 million; a differential of $73 million. 

“The revaluation was based on the midpoint of the valuation range set out in the Financial Position Report prepared by the liquidators of Shield by order of the Federal Court. This indicates that the liquidators expect a material recovery of funds on behalf of members invested in the Shield Master Fund.”

O’Brien added that the trustee continues to provide support services to impacted members and is “assisting the liquidators of Shield in their efforts to recover value for members through the liquidation process and is considering other avenues of recovery for members”.

Last month, ASIC announced that Macquarie Investment Management Limited (MIML) had committed to paying $321 million to cover the losses of thousands of Australians who invested in Shield through its platform.

ASIC 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 watchlist for heightened monitoring”. 

The regulator has also accepted a court enforceable undertaking from Macquarie to ensure it pays members 100 per cent of the amounts they invested in Shield, less any amounts withdrawn.

“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,” Court said in September.

“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, with the regulator noting it is a “matter for the court to determine whether the declarations are appropriate”.