7NEWS Spotlight has blown the lid off Australia’s biggest superannuation collapse wiping out a staggering $1.2 billion in super balances, leaving hardworking Australians shocked, angry and without answers.
Two superannuation funds, First Guardian and Shield Master, collapsed after funnelling investors’ retirement savings into high-risk and allegedly mismanaged ventures, leaving over 12,000 Australians with empty accounts and triggering a major investigation.
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That investigation aired on Spotlight on Sunday night and on Monday morning, Nationals MP Barnaby Joyce and Social Services Minister Tanya Plibersek both responded.
“They might as well have broken into a bank. This is just theft. $1.2 billion gone. Lives ruined,” Joyce told Sunrise.
Social Services Minister Tanya Plibersek said ASIC now has over 40 people investigating, but admitted the government is limited in what it can say while matters are before the court.
Plibersek urged Australians to use ASIC’s MoneySmart website before switching super funds and to seek independent, unbiased financial advice.
The corporate watchdog is under intense pressure, with critics asking why it took so long to act.
The emotional toll on the lost superannuation is immense. Adelaide couple Garry and Michelle Thomas discovered their $240,000 nest egg had vanished overnight.
“I still could look on the 30th of June this year and the money was still there. First of July, zero,” Garry Thomas told 7NEWS Spotlight.
“I think I cried all night long,” said his wife.
“I went to work the next day with red eyes and burst into tears. It’s the worst feeling I’ve ever had.”
The Australian Securities and Investment Comission (ASIC) is investigating what its Deputy Chair, Sarah Court, described as “misconduct on an industrial scale.”
Michelle and Garry Thomas speak out about the emotional toll of the vanishing of their Superfund. Credit: Spotlight
The watchdog is now with 40 officers on the case, chasing assets, freezing accounts, and seizing high-end items — including a $600,000 Lamborghini.
David Anderson, Simon Selimaj, and financial adviser Ferras Merhi are among those under investigation by ASIC over the collapse of the First Guardian and Shield super funds, with assets frozen, passports seized, and court proceedings in motion.
Merhi is facing civil proceedings for alleged misconduct, including failing to act in his clients’ best interests.
“I didn’t pocket this money,” Merhi told Spotlight.
“It’s not in my pocket. It’s monies that were spent on these ads.”
Financial adviser Ferras Merhi faces ASIC civil proceedings over alleged misconduct linked to the First Guardian super fund collapse. Credit: Spotlight
The schemes lured investors with “free super health checks” via Google and Facebook, before routing them through a network of financial advisers.
Those advisers were allegedly incentivised with tens of millions of dollars in fees to direct clients into the doomed funds.
Some even altered clients’ risk profiles without their knowledge, reclassifying conservative investors as high-risk.
Many investors had no idea their money had been moved into speculative property developments, restaurants and offshore ventures.
One of the fund architects, Simon Selimaj, has had his passport seized and his assets frozen.
A court has appointed receivers to his personal property.
Despite $441 million reportedly held by First Guardian, liquidators have only recovered about $2.2 million.
“This isn’t just about 12,000 Australians,” said victim Melinda Kee.
“This is about all Australians that put money in their super to be protected.”
In Federal Parliament, the government has come under pressure for ignoring a Senate report delivered 14 months ago, which warned ASIC was under-resourced.
Michael Usher investigates Australia’s largest superannuation collapse, exposing how $1.2 billion of retirement savings vanished. Credit: Spotlight
Evidence of misconduct was mounting long before investors saw their balances drop to zero, and the government is facing backlash for sitting on a Senate report into ASIC’s failures for over a year with the watchdog being slammed for failing to stop the collapse before it happened.
“The question that’ll be asked is, why weren’t you investigating it before the horse has bolted?” Joyce asked at Plibersek on Sunrise.
He compared the scandal to a bank robbery, calling it “just straight out graft” and “worse … it’s theft.”
“These people deserve to have the loss of their super investigated thoroughly,” admitted Plibersek.
Meanwhile, the court process drags on and the prospect of full compensation for victims appears slim.
Liquidators have warned it will take considerable time to unwind and recover any assets.
7NEWS Spotlight’s Michael Usher called it a “billion-dollar theft” that “needs to be investigated at the highest levels.”
“Thousands of Aussie investors were conned by these sophisticated schemes,” he said.
“They thought their super was safe. It wasn’t.”
For those whose funds were with First Guardian, the FTI Consulting Creditors Portal offers updates and allows investors to lodge claim forms.
While the full recovery remains uncertain, registering with the liquidator is essential to be kept informed as investigations and court proceedings unfold.
The full 7NEWS Spotlight investigation is available now on 7plus.