Why is ASIC suing former Keystone Asset Management (Keystone Asset Management Ltd) directors and committee members?

ASIC is suing former Keystone Asset Management (Keystone Asset Management Ltd) directors and compliance committee members because it alleges they breached their duties by allowing Shield Master Fund money to be invested in related entities and third parties without proper safeguards, approvals or conflict management, exposing around 5,800 superannuation investors and more than A$530 million to higher risk.

What are the key money flows ASIC alleges in the Shield Master Fund case involving Keystone Asset Management (Keystone Asset Management Ltd)?

ASIC alleges that of the more than A$530 million invested in Shield Master Fund, about A$305 million was transferred into a related property development fund controlled by Keystone Asset Management (Keystone Asset Management Ltd) and then to entities linked to two former directors, with insufficient security, valuations, or oversight and some use for unauthorised purposes.

How is ASIC describing the failures at Keystone Asset Management (Keystone Asset Management Ltd) in relation to investor protections?

ASIC says Keystone Asset Management (Keystone Asset Management Ltd) failed to ensure compliance with Shield’s compliance plan by not obtaining valuations of Shield’s assets and not managing conflicts of interest involving key individuals, and alleges that investors were exposed to conflicted arrangements and weak oversight when their money was moved to related entities and third parties without basic protections.

What does ASIC want the court to order against the former Keystone Asset Management (Keystone Asset Management Ltd) officials?

ASIC is seeking civil penalties, director disqualification orders and costs against former Keystone Asset Management (Keystone Asset Management Ltd) directors and compliance committee members, and has said the proceedings are intended to hold individuals it alleges were involved to account and to send a broader message to operators of similar managed investment schemes about acting in investors’ best interests.

How is the Shield Master Fund situation affecting investors and related parties beyond Keystone Asset Management (Keystone Asset Management Ltd)?

The Shield Master Fund case involving Keystone Asset Management (Keystone Asset Management Ltd) has led to Shield’s termination, court‑preserved assets of nearly A$200 million for unitholders, a Macquarie undertaking that returned about A$321 million of capital to roughly 3,000 investors, and separate ASIC proceedings against Equity Trustees Superannuation Limited, with further recovery actions and investigations still underway according to ASIC.

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ASIC sues Keystone directors over A$530m Shield fund

Written by Jon CuthbertPublished Jun 26, 2026, 4:27 AM

ASIC has launched Federal Court action against former Keystone Asset Management leaders over how A$530 million in Shield Master Fund money was handled.
The regulator alleges about A$305 million was moved into related entities and third parties without basic safeguards or proper approvals.
ASIC says the case aims to hold individuals to account and send a warning to managed fund operators about conflicts and oversight.

ASIC has filed Federal Court proceedings against former directors and compliance committee members of Keystone Asset Management Ltd (Receivers & Managers Appointed) (In Liquidation) over alleged failures in the management of the Shield Master Fund, which held more than A$530 million from around 5,800 superannuation investors.

The regulator alleges that about A$305 million of Shield Master Fund money was transferred to a related property development fund controlled by Keystone Asset Management and then on to entities linked to former director Paul Chiodo and former director and committee member Ilya Frolov, without basic protections such as proper security, valuations or conflict management.

“Investors in managed investment schemes are entitled to expect that their investments will be carefully managed on their behalf but, in this case, ASIC alleges investors were exposed to conflicted arrangements and poor oversight,” said ASIC Chair Sarah Court.

ASIC claims some investor funds were used for unauthorised purposes that did not have a sufficient connection to the intended property projects, including payments to related parties and third parties without required prior member approval, and alleges failures to follow Shield’s compliance plan by not obtaining asset valuations or managing conflicts involving Mr Chiodo and Mr Frolov.

The regulator is seeking civil penalties, director disqualification orders and costs against former Keystone Asset Management directors Paul Chiodo, Ilya Frolov and Mark Yorston, and against Mr Frolov and former compliance committee member Jeremy Danon, and has stated that its investigations into matters connected to Shield are continuing; following the announcement the Keystone Asset Management share price was unchanged as the company is already in liquidation.

Shield, a registered managed investment scheme since May 2021, was terminated in April 2025 after Keystone’s liquidators concluded this was in investors’ best interests, and ASIC has previously secured court orders to preserve nearly A$200 million of share‑trading account proceeds in interest‑bearing accounts for the benefit of Shield unitholders while separate recovery actions continue.

ASIC has also pursued related actions, including proceedings against Equity Trustees Superannuation Limited over alleged due diligence failures and a court‑enforceable undertaking from Macquarie that has seen about 3,000 investors receive A$321 million of returned capital, and has recently warned that strong compliance plans and active compliance committees are critical to protecting managed fund investors.