ASIC Files Civil Proceedings Against Equity Trustees Relating to First Guardian Fund

ASIC Targets Equity Trustees Over First Guardian Fund Losses

Equity Trustees Superannuation Limited (ETSL), a subsidiary of EQT Holdings Limited (ASX:EQT), has been hit with civil proceedings filed by the Australian Securities and Investments Commission (ASIC) in the Federal Court. The regulator alleges breaches related to the First Guardian Master Fund, where member losses linked to ETSL total approximately $70 million out of a $446 million overall investor loss estimated by liquidators.

ETSL has responded swiftly, confirming its intention to vigorously defend the claims. This echoes its stance in the earlier Shield Master Fund case, where ASIC also pursued civil penalties and remediation orders. Managing Director Mick O’Brien emphasised that ETSL believes it has acted in line with its fiduciary duties and compliance obligations under the Corporations Act and the Superannuation Industry (Supervision) Act.

Fiduciary Duties and Alleged Fraud at the Heart of Dispute

O’Brien characterised the First Guardian situation primarily as one involving alleged widespread fraud by banned financial advisers, promoters, and investment managers, rather than a failure on ETSL’s part. The trustee company insists the focus should remain on those parties responsible for the misconduct. ETSL continues to assist the liquidators in maximising recoveries for members through the liquidation process, while also providing counselling and wellbeing support to those affected.

This development unfolds against a backdrop of ongoing regulatory scrutiny for ETSL, which has been navigating similar ASIC actions related to the Shield Master Fund. The prior case saw ASIC expand its compensation claims following a significant revaluation of fund losses, with ETSL maintaining its position of compliance and cooperation with liquidators to recover member funds. The company’s efforts to manage these legal challenges come amid a period of strong financial performance, including a recent 67% profit surge reported earlier this year 67% profit surge.

Implications for EQT Holdings and Superannuation Sector

The proceedings add to a series of regulatory headwinds for EQT Holdings, which has been balancing growth with compliance demands. Last year, the company outlined a growth-focused strategy while contending with ASIC’s legal actions against ETSL, highlighting the sector’s tightening regulatory environment regulatory headwinds at 2025 AGM. The First Guardian case underscores the risks trustees face when overseeing external funds linked to alleged fraud and misconduct.

ETSL’s public commitment to defending the claims and assisting liquidators signals a determination to manage reputational and financial risks carefully. However, the ultimate impact on EQT Holdings will hinge on the court’s findings and any subsequent remediation orders, which remain uncertain at this stage.