ASIC hits Diversa with First Guardian court action

Mike Taylor

Managing Editor/Publisher, Financial Newswire

9 December 2025

The Australian Securities and Investments Commission (ASIC) has initiated Federal Court proceedings against Diversa Trustees alleging failures concerning the First Guardian Master Fund.

ASIC is alleging Diversa failed to conduct adequate due diligence before allowing its members to invest and failed to conduct adequate ongoing monitoring.

Further, ASIC alleges that Diversa failed to enforce a 50% holding limit it imposed for First Guardian and failed to have systems and processes in place to ensure that there was compliance with that holding limit.

For its part, Diversa has issued a statement in which it said ASIC’s claim has not altered its view that it considers the First Guardian fund’s losses to have resulted from fraudulent conduct.

ASIC Deputy Chair Sarah Court said, “This is another significant action relating to the First Guardian collapse which is an ongoing enforcement priority for 2026.”

“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,” Court said.

ASIC alleges that Diversa failed to:

• exercise the same degree of care, skill and diligence as a prudent superannuation trustee would
• act in the best financial interests of its members
• exercise due diligence in developing, offering and reviewing investment options
• do all things necessary to ensure the financial services covered by its Australian financial services licence were provided efficiently, honestly and fairly.

“This action furthers ASIC’s commitment to seek compensation for the victims of the Shield and First Guardian collapses wherever possible. Our first priority has been preserving assets for the benefit of investors to the extent they are available, and now we’re taking action to hold those we consider responsible to account with 11 cases underway in the Federal Court against 19 defendants,’ Court said.

ASIC is seeking orders for compensation, declarations and civil penalties from the Court.

ASIC and APRA continue to work closely together to hold trustees of relevant regulated super funds to account consistent with ASIC and APRA’s respective mandates and legal processes.

In its statement Diversa said in respect to claimed fraudulent conduct that it only came to light long after applications for withdrawals had been frozen by Falcon Capital, the responsible entity of First Guardian.

“Diversa has been actively monitoring First Guardian since it suspended applications and withdrawals in May 2024 and has been working constructively with regulators since it became an area of focus leading up to the proceedings ASIC initially brought against Falcon Capital and in relation to First Guardian in February 2025,” the statement said.

“Members of Praemium, AusPrac and YourChoice have suffered losses due to exposure to First Guardian and the associated fraudulent conduct. Considering the circumstances of the First Guardian fund’s losses, Diversa has determined that it is appropriate to seek financial assistance from the Federal Government under Part 23 of the Superannuation Industry (Supervision) Act 1993 (Cth). Diversa is currently in the process of preparing its Part 23 application and expects to submit the application before the end of the calendar year. Diversa considers that it is in the best financial interests of members to make these statutory applications and can confirm that any financial assistance provided will be applied for the benefit of affected members,” it said.