The Australian Securities and Investments Commission (ASIC) has commenced civil penalty proceedings in the Federal Court against Diversa Trustees Limited, alleging failures concerning the First Guardian Master Fund.

Around $300 million was invested into First Guardian from 2020 to 2024 through superannuation funds for which Diversa was trustee.

ASIC alleges 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.

The regulator 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.

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

In May 2024, Falcon suspended the processing of applications and withdrawals from First Guardian subject to some limited exceptions, to allow for a restructure of the fund and its underlying assets. The suspension was never lifted and in February 2025 ASIC took action to freeze the assets of Falcon Capital Limited and First Guardian.

Falcon Capital Limited is currently in liquidation. Ross Blakeley and Paul Harlond of FTI Consulting were appointed as liquidators of Falcon Capital and were directed by the Court to wind up First Guardian.

In April 2025, when the liquidators were ordered to wind up First Guardian, Diversa had approximately $243 million invested in First Guardian, associated with 2,055 superannuation members.