Financial adviser Ferras Merhi flags legal bid to avoid ASIC questioning in First Guardian and Shield super collapse probes

A financial adviser alleged to have funnelled more than $500 million in clients’ superannuation to two collapsed funds will seek to avoid facing questioning by the regulator. Venture Egg and Financial Services Group Australia’s Ferras Merhi appeared in the Federal Court of Australia on Monday amid legal action being taken by the Australian Securities and Investments Commission (ASIC). The corporate watchdog is investigating the collapse of superannuation funds First Guardian Master Fund and Shield Master Fund, into which thousands of Australians had collectively invested more than $1 billion. Last month, ASIC initiated proceedings in the Federal Court to expand legal action against Mr Merhi, now alleging he engaged in “unconscionable conduct”, provided defective advice and failed to act in the best interests of clients. The regulator will seek to allege Mr Merhi used marketing companies to generate leads for his businesses, with clients believing they were receiving “independent, tailored advice” while actually being pushed into products in which he had a financial interest. Between 2020 and 2024, it’s alleged his businesses received close to $40 million in payments while advising clients to invest around $296 million into First Guardian and around $230 million into Shield. In the Federal Court, Christopher Archibald KC, for ASIC, said Mr Merhi had largely consented to a series of proposed orders setting out a future timeline of the case. Mr Archibald also said the regulator would seek the court’s permission to bring proceedings against Mr Merhi’s company Financial Services Group Australia which is now in liquidation. The court also was told Mr Merhi would seek the court’s permission to be excused from further Section 19 applications – where ASIC can compel someone to answer questions as part of an investigation. His barrister, Vanessa Plain, said it was a “matter of fairness” that her client not be subject to forced questioning while he’s facing allegations of unlawful conduct. Earlier this year, the court made orders freezing Mr Merhi’s assets and barring him from leaving the county as the corporate regulator continues its investigation. The case was adjourned for a hearing on October 23 by Justice Mark Moshinsky.