Australia’s corporate watchdog has launched Federal Court proceedings against Diversa Trustees Limited over failures that left thousands of superannuation members nursing significant losses from the collapsed First Guardian Master Fund.
The Australian Securities and Investments Commission filed civil penalty proceedings on Monday, December 9th, 2025, alleging Diversa failed in its duties as trustee for superannuation funds that channelled around $300 million into First Guardian between July 2020 and July 2024.
When liquidators were ordered to wind up First Guardian in April 2025, Diversa still held approximately $243 million invested in the failed fund. Those investments belonged to 2,055 superannuation members who now face substantial losses.
Multiple Allegations Against Super Trustee
ASIC alleges Diversa committed several critical failures in its role as superannuation trustee.
The regulator claims Diversa did not conduct proper due diligence before allowing members to invest in First Guardian. ASIC also alleges the company failed to monitor the investment adequately on an ongoing basis.
More seriously, ASIC contends Diversa failed to enforce a 50 per cent holding limit it had imposed for First Guardian investments. The regulator alleges the company lacked proper systems and processes to ensure compliance with that limit.
“This is another significant action relating to the First Guardian collapse which is an ongoing enforcement priority for 2026,” ASIC Deputy Chair Sarah Court said.
“Superannuation trustees must put their members first by acting with care and skill and by carrying out proper checks on investment options made available on their platforms.”
Sarah Court, Deputy Chair, Australian Securities and Investments Commission
Which Super Funds Were Affected?
Between July 2020 and July 2024, Diversa served as trustee for multiple superannuation arrangements at different times:
- Powerwrap Master Plan
- Praemium SMA Superannuation Fund
- YourChoice Super
- Australian Practical Superannuation
YourChoice and AusPrac initially operated as sub-plans of the MAP Master Superannuation Plan before December 1st, 2020. After that date, they became sub-plans of the OneSuper Fund.
Members of these funds who had investments in First Guardian now face potential losses following the fund’s collapse and liquidation.
Diversa Defends Actions, Blames Fraud
In a statement responding to ASIC’s legal action, Diversa said fraudulent conduct only came to light long after Falcon Capital froze applications and withdrawals from First Guardian in May 2024.
“Diversa has been actively monitoring First Guardian since it suspended applications and withdrawals in May 2024 and has been working constructively with regulators since it became an area of focus leading up to the proceedings ASIC initially brought against Falcon Capital and in relation to First Guardian in February 2025,” the company stated.
“Members of Praemium, AusPrac and YourChoice have suffered losses due to exposure to First Guardian and the associated fraudulent conduct.”
Diversa has announced it will seek financial assistance from the Federal Government under Part 23 of the Superannuation Industry (Supervision) Act 1993.
The regulator has made First Guardian enforcement a priority for 2026
Timeline of the First Guardian Collapse
The First Guardian Master Fund’s downfall unfolded across several months in 2024 and 2025.
In May 2024, Falcon Capital Limited suspended processing of applications and withdrawals from First Guardian, citing a need to restructure the fund and its underlying assets. The company never lifted that suspension.
ASIC took decisive action in February 2025, obtaining freezing orders over Falcon Capital’s assets, including the First Guardian Master Fund. The regulator then applied for court orders to appoint liquidators.
By April 2025, the Federal Court appointed Ross Blakeley and Paul Harlond of FTI Consulting as liquidators of Falcon Capital. The court directed them to wind up First Guardian.
The liquidators issued an updated report to unitholders and creditors on December 2nd, 2025, providing information on the winding-up process.
Part of Billion-Dollar Superannuation Scandal
The Diversa lawsuit represents just one piece of a much larger superannuation scandal affecting thousands of Australians.
First Guardian Master Fund and another scheme called Shield Master Fund were both liquidated in 2025 after investigators found multiple alleged examples of poor oversight and regulation by various firms.
Almost 12,000 people are believed to have lost up to $1 billion due to the collapse of Shield and First Guardian combined. The scale of the losses makes this one of Australia’s most significant superannuation disasters in recent years.
ASIC has already taken action against other parties involved in the First Guardian matter. The regulator froze assets of former First Guardian director David Anderson and financial adviser Ferras Merhi as part of its ongoing investigations.
In June 2025, ASIC cancelled the Australian Financial Services licence of Financial Services Group Australia and permanently banned its Responsible Manager Graham Holmes. Certain authorised representatives of that firm provided personal financial advice to consumers to invest in First Guardian Master Fund.
Broader Context of Super Fund Scrutiny
The Diversa lawsuit arrives during a period of intense regulatory scrutiny of Australia’s superannuation sector.
In February 2025, ASIC penalised AustralianSuper $27 million for failing to merge duplicate accounts, causing $69 million in losses for 90,000 members. That case highlighted systemic issues with superannuation fund administration.
Just weeks ago, Cbus was fined $23.5 million over an insurance claims scandal. The construction industry fund systematically failed to process death benefit and total permanent disability claims within acceptable timeframes, impacting more than 10,000 members.
ASIC has signalled that superannuation compliance remains a top priority. The regulator continues to monitor industry practices and has warned funds to implement robust systems to protect member interests.
What Affected Members Should Do
Investors who placed funds in Shield or First Guardian through their superannuation accounts should contact the respective liquidators for updates on recovering investments.
The liquidators appointed by the Federal Court are handling the winding-up process for First Guardian. Members can access information through official channels provided by the liquidators and their superannuation funds.
Affected members may also be entitled to lodge a complaint with the Australian Financial Complaints Authority (AFCA). AFCA is the external dispute resolution scheme for financial complaints in Australia and must deal with complaints independently and fairly. AFCA’s service is free for consumers.
ASIC has issued a consumer alert warning Australians about the risks of complex investment schemes. The regulator urges people to be cautious when approached about switching their superannuation or investing retirement savings into unfamiliar products.
Industry Experts Weigh In
Financial experts say the First Guardian collapse exposes vulnerabilities in Australia’s self-managed superannuation system.
“Many people invested their super in these funds through an investment platform like a share-trading platform that lets you or your financial adviser make your own investment mix,” according to Super Consumers Australia.
The problem is that while platforms offer choice and flexibility, they also place greater responsibility on members to make sound investment decisions. Not all members have the financial literacy to properly assess complex investment products.
Super funds and trustees have a duty to conduct proper due diligence on investment options made available through their platforms. That includes ongoing monitoring to detect warning signs of trouble.
The Diversa case will test the extent of those obligations and may set important precedents for the industry.
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Frequently Asked Questions
Q: What is Diversa Trustees and what did they do?
A: Diversa Trustees Limited served as the trustee for several superannuation funds between 2020 and 2024, including Powerwrap Master Plan, Praemium SMA Superannuation Fund, YourChoice Super and Australian Practical Superannuation. ASIC alleges Diversa failed to properly vet and monitor investments in the First Guardian Master Fund, resulting in approximately $243 million in member funds being tied up in the collapsed fund.
Q: How much money was lost in the First Guardian collapse?
A: Around $300 million was invested into First Guardian Master Fund between 2020 and 2024 through superannuation funds for which Diversa was trustee. When combined with the related Shield Master Fund collapse, almost 12,000 people are believed to have lost up to $1 billion in total.
Q: What happens to my super if my fund invested in First Guardian?
A: If your superannuation fund invested in First Guardian, your account balance may have been reduced to reflect the loss of value in those investments. Liquidators are working to wind up the fund and recover what they can for investors. Contact your super fund directly for specific information about your account, and consider lodging a complaint with AFCA if you believe your fund failed in its duties.
Q: Can I get my money back from First Guardian?
A: Recovery prospects remain uncertain. Liquidators Ross Blakeley and Paul Harlond of FTI Consulting are working to wind up First Guardian and distribute any recoverable assets to investors. The July 2025 liquidators’ report indicated there was no ascertainable value for units in First Guardian as of the report date. Affected members should monitor updates from the liquidators and their superannuation funds.
Q: Is ASIC taking action against anyone else over First Guardian?
A: Yes. ASIC has frozen assets of former First Guardian director David Anderson and financial adviser Ferras Merhi. The regulator also cancelled the Australian Financial Services licence of Financial Services Group Australia in June 2025 and permanently banned its Responsible Manager Graham Holmes. ASIC has indicated that First Guardian remains an enforcement priority for 2026.
