ASIC sues Falcon Capital directors David Anderson and Simon Selimaj alleging First Guardian failures

Key dates

2019-08-01

Start of the period in which ASIC alleges more than $600 million was invested in First Guardian and the alleged failures occurred.

2024-05-01

Falcon Capital froze or suspended redemptions from First Guardian, subject to limited exceptions.

2025-02-24

The Federal Court made interim orders freezing the assets of Falcon Capital, First Guardian and David Anderson.

2025-04-09

The Federal Court ordered Falcon Capital and First Guardian to be wound up and appointed liquidators and a receiver in related orders.

2026-10-30

ASIC announced commencement of civil penalty proceedings against David Anderson and Simon Selimaj and its application for leave to proceed against Falcon Capital in liquidation.

Suggested considerations

• Compliance teams may wish to inventory all related-party, connected-party and director-linked investments across managed investment schemes, including indirect exposures through controlled underlying funds.
• Firms should consider testing whether each private-credit, property and private-equity investment has current executed documentation, enforceable security, independent valuation support, documented approval, appropriate concentration analysis and evidence of ongoing monitoring.
• Responsible entities and trustees may wish to reassess whether investment committees exercise meaningful independent oversight, particularly where a chief executive, director or investment officer can originate, approve or vary investments without effective challenge.
• Firms should consider refreshing conflicts registers and reviewing whether conflicts were identified, disclosed, avoided or managed before investor funds were committed, including conflicts involving hospitality, alcohol-related businesses, technology ventures, property developments and payments to entities controlled by officers or associates.
• Product issuers may wish to review product disclosure statements and other investor communications for unsupported claims about robustness, diversification, security, liquidity, risk controls or investment processes, and assess whether any corrective disclosure or remediation is required.
• Platform operators, trustees and advice licensees may wish to review onboarding and due-diligence files for complex private-market products, including verification of valuations, underlying-fund registration status, custody arrangements, liquidity assumptions and the identity of related parties.
• Advice licensees may wish to test whether recommendations to transfer superannuation or establish an SMSF and invest in high-risk managed schemes were supported by documented best-interests analysis, appropriate disclosure and suitability assessments.
• Senior managers and boards may wish to preserve records demonstrating challenge, escalation, monitoring and follow-up of exceptions, red flags, valuation concerns, redemption restrictions and unusual related-party payments.

What changed

This is an enforcement action rather than a new rule or generally applicable legislative amendment. ASIC alleges that Falcon Capital, as responsible entity of the First Guardian Master Fund, failed to maintain effective investment governance, due diligence, documentation, security, conflict management and oversight; misled investors through product disclosure statements describing robust investment processes; and allowed at least $57 million to be paid to entities controlled by Anderson or Selimaj. ASIC alleges approximately $270 million was invested through unregistered underlying funds controlled by Falcon Capital, including at least $15 million paid to Maleo Indonesia on an undocumented and unsecured basis, at least $27.9 million committed to property developments without adequate safeg

Who is affected

• Australian responsible entities of registered managed investment schemes
• Australian fund managers investing in private credit, private equity, property or other illiquid assets
• Trustees and platforms receiving or administering superannuation investments into managed investment schemes
• Australian financial advice licensees and advisers recommending complex managed investment schemes or superannuation rollovers
• Directors and senior executives responsible for investment decisions, conflicts and scheme oversight
• Investors and operators using controlled or unregistered underlying funds

Related regulations

• Corporations Act 2001 (Cth), including responsible-entity duties under section 601FC, managed investment scheme disclosure obligations under Part 7.9 and directors’ duties under Part 2D.1
• Superannuation Industry (Supervision) Act 1993 (Cth), including trustee and investment-governance obligations where superannuation assets are invested
• ASIC Act 2001 (Cth), including prohibitions on misleading or deceptive conduct in connection with financial services
• ASIC Report 814, Private Credit in Australia
• ASIC’s June 2026 ten principles for private credit done well