ASIC Sues First Guardian's Former Fund Chiefs Over A$600 Million of Mostly Super Money, Alleging A$57 Million Went to Entities They Controlled, as the Collapse Swells the Compensation Scheme Levy

The Australian Securities and Investments Commission, ASIC, has begun civil penalty proceedings in the Federal Court against two former leaders of the company that ran the collapsed First Guardian fund. Insurance Business Australia reported the case on October 30, 2026, and the details below come from that report. The court has made no findings. Every statement about the defendants' conduct in this article is an allegation by ASIC, set out in its claim, and the defendants are presumed to be able to contest it.

Who is being sued

ASIC is suing David Anderson, who was managing director and chief executive of Falcon Capital, the responsible entity of the First Guardian fund, and Simon Selimaj, who was Falcon's executive chairman and chief investment officer. A responsible entity is the company that operates a managed investment scheme and owes duties to the people who invest in it. ASIC is also seeking the court's permission to sue Falcon itself, which is in liquidation. ASIC asks for declarations, penalties and disqualification orders. It says it will not try to collect any penalty from Falcon, so that any remaining funds can go to investors.

What ASIC alleges

According to the report, ASIC alleges that between August 2019 and April 2025, more than 6,000 Australians invested over A$600 million in First Guardian, mostly from their superannuation. It alleges that about A$270 million went into unregistered underlying funds that Falcon controlled, and that at least A$57 million went to entities controlled by Anderson or Selimaj. It also alleges that specific investments were made without proper due diligence or security. The examples reported include investments in the Rogue Traders Group restaurants; Fox Friday Brewing, even though investors were allegedly told the fund would not back alcohol businesses; at least A$15 million to Maleo Indonesia between mid-2020 and mid-2022, with no documents; Maleo Singapore agreements that allegedly put A$188 million of assets on the books that were worth little or nothing; and at least A$27.9 million into property developments.

ASIC further alleges that the product disclosure statements misleadingly described the investment processes as robust, that Anderson made decisions without meaningful oversight and with undisclosed conflicts, and that Selimaj failed to supervise. ASIC chair Sarah Court is quoted as saying: "These were Australians' retirement savings." Anderson's lawyer, Dan Mackay of Mackay Chapman, is reported as saying that the claim runs to more than 150 pages, that his client was served only that day and that ASIC must still prove its case. The report says no public response from Selimaj had been reported.

How much has been recovered

The liquidators, Ross Blakeley and Paul Harlond of FTI Consulting, have reported on recoveries. The directors valued First Guardian's investments at about A$512.8 million. The liquidators have recovered A$8.02 million, which is 1.56%. The recoveries come from three groups. Investments with a book value of about A$117.6 million were written off or settled and returned A$3.49 million. Investments valued at A$50.75 million returned A$4.53 million, and full recovery is not expected. Investments worth about A$344.5 million, mostly offshore property and early-stage technology, have returned nothing. Adding the three groups of book values gives about A$512.9 million, and adding the two sums returned gives A$8.02 million, so the report's figures are consistent with one another (arithmetic done for this article). Legal fees of A$3.33 million and liquidators' fees of A$3.23 million have consumed a large share of recoveries; together they are about A$6.56 million, a sum close to the A$8.02 million recovered, though the report does not say how the fees were funded. Public examinations are due in the coming weeks, and Shield director Paul Chiodo is among those to be examined.

The compensation scheme bill

The Compensation Scheme of Last Resort, or CSLR, pays compensation to consumers when a financial firm that has been found liable by the Australian Financial Complaints Authority cannot pay. In July, the CSLR raised its estimate for FY2027 to A$198.1 million, which includes a A$30.2 million allowance for Shield and First Guardian claims. Of that estimate, A$190.3 million relates to personal financial advice, almost ten times the A$20 million cap for that subsector. About A$170.3 million above the cap must come from a special levy. Treasury's draft special levy plan would charge managed investment scheme responsible entities A$40 million, which would include Falcon, and would raise the share paid by mortgage and finance brokers from about A$668,000 to A$7.79 million. The CSLR has paid out more than A$200 million to more than 1,600 people since April 2024. General insurance brokers are currently outside the scheme, and their industry body, NIBA, has resisted bringing them in.

The insurance questions

The report says the public record does not show whether Falcon or its directors carried directors and officers (D&O) liability insurance or professional indemnity (PI) insurance, or whether any insurer is paying for their defence. It explains how such cover generally works. D&O policies usually pay defence costs, but they typically contain conduct exclusions that apply once dishonesty is proven, and civil penalties are generally treated as uninsurable. The Insurance Council of Australia has told Treasury that PI policies do not cover fraud, criminal conduct or systemic failure, and that moving more of the CSLR cost onto PI would not close the funding gap. The report suggests brokers placing cover for financial institutions should expect tougher renewal discussions about platform onboarding, related-party exposures and private credit.

Related cases and compensation

ASIC sued the former directors of Keystone Asset Management, which ran the Shield Master Fund, in June; Shield took in more than A$530 million from about 5,800 investors. ASIC says it has sued every superannuation trustee that offered either fund, including Diversa Trustees, through which about A$300 million reached First Guardian, and Equity Trustees is defending its case. Macquarie has paid A$321 million to Shield investors, and Netwealth agreed to fully compensate First Guardian members at a cost of about A$100 million. ASIC said in May that more than A$420 million had been returned to investors.

Limits

This article summarizes a single trade-press report. The allegations are unproven and no court has made findings. It is general information, not legal or financial advice.