ASIC Moves to Liquidate Falcon Capital, Fund

ASIC has intensified its crackdown on Falcon Capital Limited and its First Guardian Master Fund. In a decisive move, ASIC moves to liquidate Falcon, applying to the Federal Court to dissolve both entities. This action follows months of investigation into alleged financial irregularities and misleading practices that have left thousands of investors in limbo.

Since May 2024, First Guardian Master Fund has suspended withdrawals, preventing investors from accessing their funds. The regulator alleges that the fund, which promised “sustainable growth in the Asia Pacific region” through “responsible capital growth” and “sound risk management,” engaged in misrepresentation, conflicts of interest, and improper fund usage. ASIC also revealed that Falcon Capital, as the fund’s responsible entity, failed in its duty to ensure compliance with investment strategies that claimed to offer “absolute return investment strategies, multi-asset portfolios, and strategic asset allocation.” 

Court documents filed today indicate that ASIC seeks to appoint a receiver to manage the personal assets of Falcon Capital’s director, David Anderson. This request follows a February court order that froze the assets of Falcon, First Guardian, and Anderson. 

ASIC Moves to Liquidate Falcon Capital, Fund

The investigation uncovered overdue cash receivables totaling approximately $274 million within First Guardian’s portfolio, alongside $23 million allegedly misallocated to marketing firms in contradiction to investor disclosures. Additionally, ASIC has raised concerns over potential conflicts of interest, as Anderson reportedly held personal financial stakes in entities that received fund investments. ASIC warned in its court filings that the fund may have misled investors about the security and expected returns of their investments.

The case is scheduled for a hearing on April 9, leaving investors anxiously awaiting a resolution. Lead generators directed many investors to First Guardian and connected them with financial advisers who recommended shifting their retirement savings into self-managed superannuation funds (SMSFs) or retail choice funds for investment in First Guardian. In earlier communications, Falcon Capital hinted at transitioning the fund towards listed instruments rather than private equity projects. 

However, by March 11, the firm informed investors of its plan for an “orderly wind down” in response to ASIC’s actions. This case forms part of ASIC’s broader financial misconduct crackdown, which already led to asset freezes against financial adviser Ferras Merhi and former director Osama Saad in February. Both individuals allegedly had ties to First Guardian’s operations.

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