ASIC confirms scrutiny of Macquarie and EQT over Shield Fund

The Australian Securities and Investments Commission (ASIC) has confirmed that Macquarie and Equity Trustees remain under scrutiny over their arrangements with respect to investments in the Shield Master Fund.

ASIC confirmed to a hearing of the Parliamentary Joint Committee on Corporations and Financial Services that it was looking “at whether or not there is any conduct of concern by either Macquarie or Equity Trustees.

Questioned on the Shield Master Fund issue by the chair of the PJC, Labor backbencher, Daniel Mulino, ASIC deputy chair, Sarah Court described the regulator’s investigation as “very significant”.

“[It is a] ery significant investigation that ASIC is undertaking,” she said.  “We commenced surveillance and then a formal investigation into Keystone Asset Management which is the responsible entity for the Shield Master Fund and we commenced that in September, 2023.”

“Our concerns here are that there are a large number of consumers who have invested significant funds in this Shield Master Fund and we had some concerns about how those monies were being treated and whether there was any conduct of concern that we needed to take action in relation to,” Court said.

“These are effectively people’s superannuation investments.”

“We did have concerns. We took court action against Keystone Asset Management in June of this year seeking freezing orders to preserve the monies that were in that fund.

“As a result of that court action there have been receivers and managers appointed to Keystone and subsequently voluntary administrators and that is very important because having the administrators in the fund means the funds are effectively frozen while the administrators do their work and ascertain to what extent there is any deficiency in relation to investors’ funds.”

“We are continuing to look at the conduct in relation to individuals involved in that and the link through to Macquarie is that the consumers who invested their superannuation monies did so through superannuation platforms one of which was hosted by Macquarie and a second which was hosted by Equity Trustees.”

“We are looking at whether or not there is any conduct of concern by either Macquarie or Equity Trustees in relation to the facilitation of those very significant investment funds through their platforms,” Court said.

Asked by Mulino when ASIC was likely to bring the matter to a conclusion, Court said it was hard to predict because it is a very complex investigation.

“We have stood up a full team of our very experienced investigators to look at this,” she said.

“The conduct spans cold calling of consumers by lead generators through to financial advice and potential mismanagement of investment funds through to the role of the platform hosts.”

Court said it was likely to be at least the first half of next year before ASIC had “a better idea of what the facts are and where our investigation may proceed to”.