ASIC takes Equity Trustees to court over breaches

The Australian Securities and Investments Commission has launched civil penalty proceedings in the Federal Court against EQT Holdings’ (ASX:EQT) Equity Trustees Superannuation, alleging severe breaches of superannuation law.

The corporate watchdog claims the trustee failed to exercise due care, skill, and diligence before onboarding the First Guardian Master Fund.

According to ASIC, Equity Trustees permitted approximately 2,700 members of NQ Super & Pension to funnel more than $65 million into First Guardian between June 2023 and March 2024.

The regulator alleges the company breached sections 52 and 52B of the Superannuation Industry (Supervision) Act 1993 by failing to obtain crucial foundational information—such as the fund's constitution and audited financial accounts—and allowing members to invest 100% of their savings despite evidence the fund was illiquid.

ASIC is seeking civil penalties, declarations, and member compensation for the resulting financial losses.

The litigation marks the regulator's fifth action against a superannuation trustee stemming from its broader investigation into the Shield and First Guardian master funds.

"Superannuation trustees play a critical role helping their members save for retirement, but we allege Equity Trustees failed to put the interests of their members first," ASIC Deputy Chair Sarah Court said.

In response, Equity Trustees Managing Director Mick O'Brien stated the board intends to vigorously defend the allegations, maintaining the company acted in accordance with its fiduciary duties and arguing that First Guardian is primarily a case of widespread external fraud.

At the time of reporting, EQT Holdings’ share price was $16.66.