ASIC takes action on Australian Fiduciaries

ASIC is investigating Queensland financial services firm Australian Fiduciaries, which has $160 million of investor money, and seeks asset preservation orders and the appointment of receivers.

ASIC believes that about 600 retail investors have invested approximately $160 million into managed investment schemes run by Australian Fiduciaries since February 2020, predominantly through their self-managed super funds (SMSFs).

Australian Fiduciaries offers the Global Diversified Alpha Fund, Global All Seasons Fund and Global Multi-Strategy Fund. It ceased distributing units in the schemes in September 2023.

ASIC said its application to the Federal Court seeks to preserve the assets of the scheme and obtain a clearer picture of the financial position of Australian Fiduciaries and its schemes while ASIC continues its investigation.

Australian Fiduciaries failed to lodge audited financial statements or audited compliance plan reports for its registered managed investment schemes for the 2024 financial year and for the first half of FY25.

ASIC understands that it has also failed to keep investors updated on the status of their investments since May 2024.

ASIC said its investigation concerns inadequate management of conflicts of interest.

The ways investors were sold units in the schemes and how their funds were ultimately invested into a complex group of entities controlled by related parties is also a concern.

Another failure is to conduct regular valuations of its schemes, as well as the loss of value in the underlying assets.

In a June 12 investor update, Australian Fiduciaries said the "FY2024 financials have been drafted and are with the auditors. The requirements of our independent auditor directed to us are aimed at further enhancing accuracy and compliance. To that end, the auditor is requesting more granular and detailed verification regarding the valuation of the underlying assets held by the Fund(s)."