The Australian Securities and Investments Commission (ASIC) has secured Federal Court interim orders preventing Ferras Merhi from operating in the financial services industry following ASIC’s allegations that Mr Merhi engaged in unconscionable behaviour, failed to act in the best interests of clients, gave conflicting advice and provided faulty advice statements receiving millions of dollars.
This outcome forms part of ASIC’s ongoing investigations into the Shield Master Fund and the First Guardian Master Fund.
Today’s result immediately restricts Mr Merhi, or through his employees, agents or employees, from carrying on any business relating to financial products or financial services, providing advice on financial products, trading financial products or marketing pension products or managed investment schemes.
In his reasons for ordering the interim injunctions against Mr Merhi, Judge Moshinsky said he was satisfied that the public interest required the injunctions to be granted and that there was a significant risk that, unless restrained, Mr Merhi would continue to provide advice on financial products in a manner contrary to the Companies Act.
ASIC also succeeded in obtaining orders appointing a receiver who will identify all of Mr Merhi’s assets and liabilities and report to the Court within 90 days. Mr Merhi’s assets have been frozen from February 2025 and he is restricted from leaving Australia from July 2025.
A provisional liquidator has also been appointed to Venture Egg Financial Services Pty Ltd and United Financial Advice Pty Ltd, entities through which Mr Merhi and other financial advisers provided financial advice to clients, and must report to the Court within 28 days on the financial position, solvency and potential returns to creditors of the two companies, as well as for any suspected violations by officials.
Between 2020 and 2024, Mr Merhi and advisers working for him allegedly advised clients to invest about $296 million of their pension in First Guardian and about $230 million in Shield.
In return, ASIC alleges Mr Merhi’s businesses received:
- nearly $18 million in upfront consulting fees. and
- more than $19 million from First Guardian-related entities to promote First Guardian to customers.
Both First Guardian and Shield have now collapsed, leaving the pensions of thousands of customers at risk.