Federal Court Restrains Ferras Merhi from Financial Services Following ASIC Allegations

The Australian Securities and Investments Commission (ASIC) has secured interim Federal Court orders restraining Ferras Merhi from operating within the financial services industry. The orders were granted based on ASIC's allegations that Mr. Merhi engaged in unconscionable conduct, provided conflicted and defective advice, and failed to act in his clients' best interests while receiving millions of dollars.

The court action is part of ASIC's ongoing investigations into the collapsed First Guardian Master Fund and Shield Master Fund. Between 2020 and 2024, Mr. Merhi and advisers at his firms allegedly advised clients to invest approximately $296 million of their superannuation into First Guardian and $230 million into Shield.

ASIC alleges Mr. Merhi's businesses received nearly $18 million in upfront advice fees and over $19 million from entities associated with First Guardian for marketing the fund to clients. Both funds have since collapsed, leaving thousands of clients' superannuation at risk.

The court orders immediately restrain Mr. Merhi from carrying on any financial services business, providing financial advice, or marketing superannuation and managed investment schemes. In granting the injunctions, Justice Moshinsky stated he was "satisfied that the public interest requires the injunctions" and noted "an appreciable risk that, unless restrained, Mr Merhi will continue to provide financial product advice in a manner that contravenes the Corporations Act."

The court also appointed a receiver to identify all assets and liabilities of Mr. Merhi, whose assets have been frozen since February 2025. He has also been restrained from leaving Australia since July 2025. Additionally, a provisional liquidator was appointed to Venture Egg Financial Services Pty Ltd and United Financial Advice Pty Ltd, entities through which Mr. Merhi and other advisers provided financial advice.