Corporate regulator sues superannuation trustee Diversa over $300m invested in failed First Guardian fund

The corporate regulator is suing superannuation trustee Diversa over the collapse of First Guardian Master Fund, alleging it failed investors who invested $300 million through its super platforms.

In a widening series of lawsuits over the collapse of First Guardian and the Master Shield Fund, the Australian Securities and Investments Commission claims Diversa did not conduct adequate due diligence on First Guardian before allowing its members to invest and failed to enforce holding limits on the fund.

“Superannuation trustees must put their members first by acting with care and skill and by carrying out proper checks on investment options made available on their platforms,” ASIC deputy chair Sarah Court said.

Melbourne-based Diversa is responsible for 16 superannuation funds holding the savings of more than 350,000 members.

However, in supporting documents for the civil lawsuit filed with the Federal Court, ASIC alleges that Diversa did not act in the best interests of investors by “failing to warn each member of the risk of illiquidity of First Guardian; and by failing to enforce a limit on the level of investment by members”.

It said Diversa enabled members on three superannuation platforms it administered as trustee — the Powerwrap Master Plan, the SMA Superannuation Fund and YourChoice Super — to invest in First Guardian, despite limited information, a thin performance history and the fund’s substantial illiquid investments.

About $300m was invested through the platforms in First Guardian from 2020 to 2024. By April 2025, when the liquidators were ordered to wind up First Guardian, 2055 super members were owed $243m.

Diversa, ASIC alleges, “did not obtain a copy of the (First Guardian) managed investment scheme constitution, or . . . any constitution or product disclosure statement for the nine underlying funds, or review the valuation or the liquidity of any such assets”.

“Despite the limited information and the apparent serious risks associated with investment . . . Diversa’s investment committee approved each of the (First Guardian) classes for selection as investment options”, it said.

Diversa said it would defend the ASIC action and argued that fraudulent conduct was behind the member losses, thereby entitling it to Federal Government help to recover the funds.

It understood that affected members “may be experiencing stress, anxiety and feelings of uncertainty in response to the significant financial losses which are expected as the First Guardian liquidation proceeds”.

“ASIC’s claim has not altered Diversa’s view that it considers the First Guardian fund’s losses to have resulted from fraudulent conduct,” it said.

“Considering the circumstances . . . Diversa has determined that it is appropriate to seek financial assistance from the Federal Government.”

It also noted “that in addition to the actions in respect of Falcon Capital (the responsible entity of First Guardian), ASIC has commenced proceedings against Interprac Financial Planning Pty Ltd and entities associated with the Venture Egg financial planning business who (along with others) advised a number of individuals to invest in First Guardian.

“As part of Diversa’s response to the claim, Diversa will be giving consideration to the role that these and other parties may have played in causing loss or damage to members in connection with the First Guardian collapse,” it said.