The Australian Securities and Investments Commission (ASIC) has sought court approval to expand allegations against former financial adviser Ferras Merhi, claiming he engaged in unconscionable conduct while receiving millions in fees from collapsed superannuation funds.
ASIC alleges Merhi used marketing companies to direct clients to his advice businesses, Venture Egg and Financial Services Group Australia (FSGA), between 2020 and 2024. During this period, advisers allegedly recommended clients invest approximately $296 million of their superannuation into the First Guardian Master Fund and $230 million into the Shield Master Fund.
In return, ASIC claims Merhi’s businesses received nearly $18 million in upfront advice fees and more than $19 million from entities associated with First Guardian for marketing services. Both funds have since collapsed, placing thousands of clients’ retirement savings at risk.
“This type of conduct doesn’t just undermine the integrity of the financial advice and superannuation industries, it can have a devastating impact on people’s lives,” said Sarah Court (pictured), ASIC deputy chair.
The regulator alleges Merhi provided clients with statements of advice containing false representations about the Shield Master Fund, suggesting it was operated by Macquarie. ASIC also claims he falsely stated he had no vested interest in the recommended funds while secretly receiving tens of millions for marketing First Guardian.
“Clients allegedly were led to believe they were receiving independent, tailored advice. Instead, they were allegedly channelled into pre-determined investment portfolios that were highly risky and served the financial interests of Mr Merhi and his businesses,” ASIC stated.
If approved by the Federal Court, ASIC will seek injunctions preventing Merhi from involvement in financial services, the appointment of a receiver to his personal property, and provisional liquidators for his companies.
The expanded case includes allegations of breaching multiple sections of the Corporations Act, including failing to act in clients’ best interests, providing inappropriate advice, and conflicts of interest.
Merhi remains subject to interim asset freezing orders until December 12, 2025, implemented in February. Travel restraint orders preventing him from leaving Australia were imposed in July and remain in effect until December.
ASIC cancelled FSGA’s licence in June and permanently banned its responsible manager. The regulator’s investigations into Shield and First Guardian are ongoing.
Affected clients can lodge complaints with the Australian Financial Complaints Authority by calling or reaching out online. Those seeking to complain about FSGA advice must do so by June 4, 2026.
