ASIC takes action on Falcon Capital directors

ASIC is suing the directors of Falcon Capital, the responsible entity for the failed First Guardian Master Fund, alleging "serious and widespread failures" in their oversight.

ASIC commenced civil penalty proceedings in the Federal Court against Falcon Capital's former managing director and chief executive David Anderson, and executive chair and chief investment officer Simon Selimaj.

ASIC is also seeking leave from the court to commence proceedings against Falcon Capital, which is in liquidation.

ASIC alleges Falcon Capital made investments with inadequate documentation, insufficient security, inadequate due diligence and unmanaged conflicts of interest.

These included investments in hospitality businesses and technology ventures in which Anderson had a personal interest, as well as payments of at least $57 million to entities controlled by Anderson or Selimaj.

Between August 2019 and April 2025, more than 6000 Australians invested more than $600 million in First Guardian, largely from their superannuation. ASIC believes Falcon Capital invested some $270 million through unregistered underlying funds it controlled, with substantial amounts paid to a range of entities and ventures without appropriate safeguards.

The slew of allegations include Falcon Capital misleading investors in its product disclosure statements by representing that First Guardian had robust investment processes in place.

First Guardian allegedly invested in the Rogue Traders Group of restaurants without adequate due diligence or security, and in Fox Friday Brewing, despite representations that it would not invest in companies operating businesses involving alcoholic beverages.

Between July 2020 and July 2022, at least $15 million was paid to Maleo Indonesia on an undocumented and unsecured basis.

Falcon Capital entered into an agreement with Maleo Singapore to create assets worth $188 million on First Guardian's balance sheets but such assets had little or no value.

Falcon Capital paid at least $27.9 million towards property developments, on an undocumented, unsecured basis, and without adequate due diligence.

As for Anderson, ASIC said he controlled investment decisions without meaningful oversight, failed to disclose conflicts of interest and failed to act in members' best interests. Meanwhile, Selimaj failed to act in members' best interests by inadequately monitoring Falcon Capital's activities.

ASIC chair Sarah Court said the allegations in this case highlight the problems ASIC has identified in private credit, including poor governance, conflicts of interest and weak oversight, and the consequences these can have for Australians' investments and retirement savings.

"ASIC has now commenced proceedings against key former officeholders of both Shield and First Guardian, and we will continue to pursue those we believe are responsible for putting Australians' retirement savings at risk," she said.

If successful, ASIC seeks declarations, civil penalties and disqualification orders.

To ensure any available funds are returned to investors, ASIC said it will not seek to enforce any penalty obtained against Falcon Capital.

"Hundreds of millions of dollars were allegedly channelled into high-risk and conflicted investments with inadequate scrutiny, oversight or governance and without regard to members' best interests," said Court.

"These were Australians' retirement savings, yet ASIC alleges millions of dollars were handed over before contracts were even in place, including for investments linked to those running the fund."

Falcon was also the responsible entity of the Chiodo Diversified Property Development Fund, whose director Paul Chiodo is also under an ASIC investigation.