Tag Archives: ASIC

September 23, 2025 · 11:30

The time has come

I have been sitting on a story for about three days. I have been hesitant as it is a field I am thoroughly unaware off, but it could hit me in the future and as we are given (at https://www.abc.net.au/news/2025-09-19/first-guardian-shield-collapse-asic-and-superannuation-flaws/105783328) the setting of ‘First Guardian, Shield superannuation disasters expose deep flaws in Australia’s $4.3 trillion retirement system’ we see that ABC is giving us not only cause for pause, but also cause for alarm we are set in a stage of almost desperate inability to protect our retirements. And lets be clear if Australia is set to a $4.3 trillion danger, what is the dangers towards America, Canada, the United Kingdom, France and Germany?

I tried to illustrate dangers like this in ‘Wages of fear’ which I wrote in May 2023, two years ago (at https://lawlordtobe.com/2023/05/02/wages-of-fear/) and there I wrote “Lets be clear, this was NOT his fault, but the point where we cannot avoid what comes next was achieved. If only people had woken up a lot sooner. But there we got past a point where the problems would accelerate and now we are almost at that point. And the banks will be no help. I tried to warn you a few times over. Some of their risk and liquidity is in US bonds and when the US forfeits payment your 401K and many other things will become worth close to nothing” Now the fair question is, is this the same? I don’t think it is, but there is a larger failing into the retirement systems as it is not a hands on pathway. ABC in another story hands us “Ms Wohlers is one of about 12,000 Australians haunted by the loss of more than $1 billion of retirement savings after the collapses of First Guardian and Shield.” As well as “ASIC deputy chair Sarah Court, who has commonly described the First Guardian and Shield cases as “industrial-scale misconduct”, says the regulator acted as soon as it could. “We don’t think we missed red flags,” she told ABC News ahead of ASIC’s appearance at a parliamentary hearing on Thursday, when she was grilled by politicians about whether it was a tough cop on the beat properly identifying financial misconduct.” And it relates to the story we are given with ‘140 targeted by ASIC on Shield, First Guardian’ as I see it, a mess of a disastrous kind. Where the latter gives us “So, for example, the financial advisers are saying to us ‘you can’t hold us accountable for this because the ratings house had rated the Shield Master Fund as of investment grade’, while superannuation fund trustees are telling us the same – ‘well, we relied on the ratings houses’, or ‘we relied on the fact that these members had financial advice’,” (Source: Financial Newswire) I see it as a setting where there is a ring setting with no beginning and no end. I am in a setting where Microsoft could steal my IP and my only defense would be to convict 280,000 Microsoft employees to death and kill them myself. I get that this is utter madness, but that would be the result of one party just playing a game with other whilst that party knows that they cannot be held to account. I remember the rating houses in 2008 and they got away whilst millions lost it all. I see the simpler setting “You take from me, I take from you” and the setting that Microsoft losing over 45% of its staff (I am utterly destined to fail) making it implode on itself. Now take that to the setting of rating houses and the the truth comes out (if it ever does) the people need to react and react harshly. It is not ‘business as usual’ it will become business at the cost of souls and that is a harsh reality to face.

So whilst some will lawyer up and that is their right, they should not be allowed to walk away with even a dime. I reckon that they will sue the rating houses and those rating houses will need to get sanitized (to some extent) because losing billions is a larger setting and when Australia with their billions in losses (up to 4,300 billion) the setting for America and Canada is a lot more severe. And America up to ten times as much as Canada faces. And about a month ago we were given ‘ASIC takes further action against Ferras Merhi over First Guardian and Shield superannuation advice’ where we are given “ASIC has sought leave from the Federal Court to expand its existing proceeding against former financial adviser Ferras Merhi to allege he engaged in unconscionable conduct, failed to act in the best interests of clients, gave conflicted advice, and provided defective statements of advice whilst receiving millions of dollars.” Yet my question becomes did Ferras Merhi do anything illegal? You see, in my setting I would be, but did he do anything illegal? The setting revolves around “provided defective statements of advice whilst receiving millions of dollars”, so what makes a statement ‘defective’? You see, I am not protecting Ferras Mehri. I am looking at the following:

s12CB of the ASIC Act – engaging in conduct in connection with the supply or possible supply of financial services, which was in all the circumstances unconscionable.

So, what makes the setting of “all the circumstances unconscionable” an economist looks at this in one way and I as a law graduate and IT technician in another way.

Then we get:
s952E of the Corporations Act – providing defective disclosure documents. As such, what makes the documents “defective disclosure documents”, I do not know and I look at them separately as that is what the law does and when merely one law falters, it all collapses (it matters later on).

Then we get:
s961B of the Corporations Act – failure to act in their client’s best interests, and what is that at the start? Most clients are ‘greed’ driven, they want the highest return and that is ‘their’ best interest. It is a hard lesson to learn that looking back the client gave the wrong advice to the advisor. I myself only work a balanced portfolio, I will never make large leaps but then again I am unlikely to lose a lot either.

So in that setting we see:
the Court made interim freezing orders over Mr Merhi’s property. These orders remain in place until 12 December 2025 (25-024MR).
ASIC cancelled the AFSL of FSGA, effective 7 June 2025 and permanently banned its responsible manager (25-102MR).
In July 2025, the Court made travel restraint orders against Mr Merhi. Those orders prevent him from leaving or attempting to leave Australia until 12 December 2025, or until further order of the Court (25-024MR).

That is fair enough I reckon. But now we get to the settings that ABC at the top gave. We see there “In all of these cases, no criminal charges have been laid, but ASIC is heading to court to make allegations against the people at the centre of the Shield and First Guardian funds — those involved in managing and promoting the schemes.” The no criminal charges gives pause to consider that no criminal acts have transpired and when we look at some of the allegations the two that take the cake (a Tiramisu cake) is that the settings of “defective disclosure documents” must be proven and the lawyers will fight that. Then we get “all the circumstances unconscionable” and that is the ballgame, ‘unconscionable’ is not per se illegal and it is about the legality of the matter in court and that is the setting we see. So when I made a statement two years ago saying “Some of their risk and liquidity is in US bonds and when the US forfeits payment your 401K and many other things will become worth close to nothing” we see what bonds were worth 5 years ago. There we see “For the year, long-term U.S. Treasuries were by far the best-performing fixed-income investments, with a nearly 17% gain,” (source: Reuters) at present they are “the 10-year yield settled around 4.36%” that represents a loss of 13%, so who pays for that bond? This was a danger I saw 5 years ago (as uneconomical as I am) and 10 years ago I heard people to buy bonds as the interest is like free money and I stopped. There is no free ride and this is almost pushed into the AI field all whilst there is no verification in place. All settings that are interconnected and we now see the ABC giving us “expose deep flaws in Australia’s $4.3 trillion retirement system” so, what do you think you will end up with because as I see it, there is the chance that these people can do what they like all whilst there is no criminal accountability. Yes, he is stopped for now, but Ferras Merhi is about to walk away with more than $19 million in payments. As such he is willing to sweat it out for a few months. It is a lot more (like 79.2581 times more) than I ever made in my lifetime.

So I see this case that ABC alerted me to with some suspicion. These people live by the setting of walking the edge of legality, there is no risk at that edge and I expect that Ferras Merhi is doing just that not doing anything illegal. As such 12,000 Australians are about to learn that they could lose it all without any illegal actions transpiring and I fault it to two settings (mentioned above) and we all considering setting the clocks to Islam where we see “Islamic banking prohibits the use of interest, speculation, and excessive risk. It emphasizes profit and loss sharing, fairness, honesty, and transparency in financial dealings.” By the way this setting was in place for hundreds of years.

Have a great day and see that Statista gives us “Robusta, named because it can grow at a wider range of altitudes and temperatures, sold for 1.87 U.S. dollars in 2018, projected to sell at 5 U.S. dollars per kilogram in 2026” did you predict in 2018 that you would be setting your retirement to pay 267% for your coffee?

Influenced by license holder

Yup, this could be a setting according to the BBC. It started on March 19th 2022 when I wrote ‘57 seconds until the next sucker’ (at https://lawlordtobe.com/2022/03/19/57-seconds-until-the-next-sucker/), there I discussed two types that go for your budget. The deceptors and the influencers. Now we see (at https://www.bbc.com/news/technology-60787296) that gives us ‘Influencers in Australia risk jail for breaking finance tips rules’. In this article we get to see “The Australian Securities and Investments Commission (ASIC) says they may need a licence to give such advice. A 2021 ASIC survey suggested 33% of 18 to 21-year-olds follow financial influencers. And it also found that 64% of young people in Australia changed a financial behaviour because of an influencer.” And here the issue starts. You see, the difference between a flaccid proclamator and the gung-ho prosecutor are mere results. So If “A 2021 ASIC survey suggested 33% of 18 to 21-year-olds follow financial influencers” means that 1-4 people are now facing prosecutions, we could say OK, thats nice, but 1-4 out of? It implies that the female influencers are about meeting a man who can skin a gator so that they can get a really cheap handbag and the male influencers would be about how to best poach a gator and turn that into a handbag to score the sheila in the wild (a subtle Crocodile Dundee reference). But if this implies that you are reporting on 50-100 influencers the message becomes “So, WTF are you waiting for?” Influencers have been on the radar for years, as such reporting on this NOW implies that you need to find your viagra stash, that stash has tablets that looks like (see below)

So as we see “In February, the UK Financial Conduct Authority (FCA) urged caution over the use of influencers in the marketing of financial products. “Retail investments’ use of social media influencers on various platforms to market investments is becoming a concern for us,” the financial watchdog said. “Firms should ensure they have taken appropriate legal advice to understand their responsibilities prior to using influencers.” And there has been particular concern about the use of influencers in cryptocurrency marketing.” I personally wonder why this news is not 2+ years old. Because as I personally see it at present influencers will now react to the degree of “I did not know it was illegal, I only saw the news last Tuesday”, impeding prosecutions. Yes, that a really bright idea. We would like results, not excuses and according to one source an influencer “is someone with a loyal and larger than average social media following. Some influencers have as few as 3,000 followers! Influencers are paid by brands to create and post promotional content.” So we get two settings now, the influencer and the brand who engages the influencer. I would state that the brands warrant investigations as well. And lastly we get “In the same month, Spain’s National Securities Market Commission also revealed plans for new rules for advertising crypto-assets, including promotions by social media influencers.” As such Spain might be 2 years late, but Australia? How up to date were they, how many influencers were confronted, how many brands were confronted? We see nothing of that here and that beckons questions. How behind are the lawmakers and their governmental watchdogs exactly? A simple question and train of thought that the article raised, are you not curious how protected you actually really are?

A Spruiker’s deal

I got caught out a few days ago. There was something about the spruikers deal and me with my European education thought it was some kind of a Dutch deal. Now I am learning it is nothing of the sort and the entire spruikers issue is a real and a very dangerous one.

It seems there are two methods (at http://www.abc.net.au/news/2014-02-24/wa-lead-charge-on-property-spruikers/5280420), one is the rent-to-buy the other is the Vendor finance with a delayed settlement. To be honest, I do not see the initial deal with the objection to this. Consider that I end up being renter to buy, with basically the rent becoming the mortgage. What is wrong about that?

That part is seen when we look at the following two quotes: “Some of them are doing very legal things and they’re giving advice and they’re qualified to do so, but then there are those who promise things to those who look for hope, who have perhaps not been able to afford their own home in the past or not been able to enter the market of investment” and “They’re the type of people we target as collectively, ministers for consumer affairs, to make sure that the advice that’s being given is both legal and ethical“. So basically, the entire spruikers deal is about hunting down the unethical exploiters and the damage that they cause.

When looking into these losses, I learned that this is not a new issue. The Spruikers deal and negative gearing has been around for some time and the news has been mentioning issues of exploitation going back to far beyond 2011. This is not a new deal, so why does this remain an issue?

In my mind, the world (Australia too) is filled with idiots who think that there is a quick deal, that makes you rich. The old saying ‘if you buy a diamond for a dime, you end up owning a diamond not worth a dime‘ is the most fitting expression that applies here. Some sales people rely on greed the others on desperation. The big thing is that some are actually on the up and up and as such, this is why the entire spruikers deal stays around for so long.

I see that at times desperation is at the centre of it all. The Age had an interesting quote on April 18^th 2013 “ASIC reviewed 100 investor files relating to the establishment of an SMSF. The files were not selected randomly. Most of the DIY funds had a fund balance of less than $150,000. Industry professionals often cite $300,000 as being the minimum needed to make the costs of running a DIY fund worthwhile“. Here is a truth we can work with. A group of people with an insufficient super to make it through retirement is getting targeted to invest in what should be seen as way too risky, especially when the investment would likely deplete your investment to ZERO. This is at the centre of it and this should give a clear signal to the UK that what has been happening in Australia could easily happen in the UK (and is already happening to some extent). Consider the housing boom that the UK is now having (because of regulatory investment options), how long until less scrupulous real estate agents start playing that card? Our collective retirement options are not that great; keeping the retirement options safe for these people should be on the minds of watchdogs in both the UK and Australia.

Yet, I am still smitten with the rent-to-buy option in both the UK and Australia. For the governments to invest in those places allowing people the rent-to-buy option will have two distinct bonuses. One, people will take increasingly care of these places, giving a better long term value to areas that are now often ‘written off’. In addition, the entire community will get an increased economic boost as rent is no longer a down the drain issue, but the start of a future. I see this as a possibility in some places where at present a non-future is regarded to be the norm.

Should the government get involved?

This is a valid question and even though there is validity in both answer options, my answer to this is ‘Yes!‘. In my view, in Australia (and to some extent in the UK as well), the government has remained massively absent when it comes to the creation of affordable housing. The issue of less than 1% rental availability in Sydney alone for well over a decade is clear evidence of that. NSW housing is dealing with a backlog of well over a decade. This is evidence of a faltering system. A government rent-to-buy option could make a change, but it is important to act firmly with some caution, to avoid some quick scheme that will backfire on both the tenant owner and the government in equal measure.

Yes, I think we can all agree that these options are not meant for villages like London and Sydney, but there are plenty of places where it could make a real difference, lowering rental tensions all over the nation(s). Another view of the dangers of spruikers can be seen in the Sydney Morning Herald, an article that was published in August 2013 (at http://www.smh.com.au/business/property-spruikers-scent-big-opportunity-in-super-20130830-2swcq.html).

It clearly shows the issues about all the good and none of the risks being disclosed and it also mentions the real life dangers (read risks) that these investors face making it all a high risk endeavour. In that article another link (as statement) is added “Large funds trying to bridge gap with flexible investment options“. So are spruikers the undefined link between funds (trying again to get high risk yields by dumping the consequence on unsuspecting consumers) and flexible and quick dumped options, leaving the trustee (you, the investor) with a bag of smelly poo no one wants? That is the question that should be raised as well.

This is at the centre of the Spruikers deal and as long as some people are desperate to assure themselves of a decent retirement, spruikers will remain a danger. It is at the end of the Sydney Morning Herald article where we see the jewel we need to keep in our hearts. It was stated by Pauline Vamos, chief executive of the Association of Superannuation Funds of Australia. She says “anybody giving advice – even if they say they are only providing ‘information‘ – about any investment into an SMSF should be licensed. That would start to ‘turn the tide‘ against property spruikers, she says. ‘It would help fill consumer protection gaps.’”

In my view she is entirely correct. Yet, at this point, the government should intervene to another extent. Whether it is in the way South Australia did a few years ago by handing $1 (or at least a really low amount) leases of land to new builders, or to get the rent-to-buy going in other directions, rental properties are not here and there is no light at the end of the tunnel for a long time to come. Only when those issues are dealt with, new progress can be made and these spruikers are likely to seek other shores for a quick profit.

1 Comment

Filed under Finance, Politics

Tagged as ABC News, ASIC, Australia, NSW, Pauline Vamos, SMSF, South Australia, Spruikers, Sydney Morning Herald, UK

November 22, 2013 · 13:49

Protecting Consumers!

I am still on the Sony horse! It is interesting to see how consumers are do not seem to be protected and how little visibility some cases seem to get. I seem to have found what I consider to be severe consumer injustice!

This injustice is on two levels. The first level is on the side of ‘the small print approach’, the second side is on the consumer side through the shops. So as discussed in my previous blog (pricing a Sony game), where they changed the user agreement to make illegal the reselling of games and on the other side the TPP will allow them big companies to charge us more.

At the DPP, no one was willing to take any calls (they apparently do not take any calls ever). They referred me to the ASIC and the Law society of NSW. They were little help, however the Law Society did what it service minded does, and they would be able to refer me to private solicitors. This is what they do (and what they are supposed to do), so there is no case here, other that they were willing to give all the assistance they could. From there I ended up with the fair trades commission who listened and explained on how I had to go to the ACCC.

The ACCC logged the issue and it is now investigated internally.

I also talked to Channel 7, Channel 9 as well as the Sydney Morning Herald. They were all interested, but seemingly unaware to the issues that are going on at present. In my view I have always be loudly outspoken against this and I did so against the acts of Don Mattrick when he was with Microsoft. It seems hypocrite not to speak out against Sony when they try to hide in the weeds not quaking!

I am all for protecting gamers, if the little time I have left on this earth is to get some protection for them against injustice and greed, then this is a fight worth fighting. The gamers are now swiftly placed between the TPP (Trans Pacific Pact), raising the price of entertainment even further and the forces crushing the options of pre-owned games for those not being able to afford full priced games, something must clearly be done.

It is also interesting how the government and the Fair Trade commission remain silent on these matters. Shops rely on pre-owned games to survive after the margins of new games are reduced to an absolute minimum. The pre-owned games keep them into business. As large companies are paying less and less corporate tax as their offers go to downloaded revenue (which often goes via non-commonwealth tax shelters). We see that they are paying less and they are the cause of shutting down local shops with these new arrangements. I believe in fairness and at present there is no fairness in any of this.

Too squeeze a population already in hardship, to hurt them even further with these events is beyond acceptable!

In case you see some response on ‘generic’ or some party line response how this is not the intent of the Sony User agreement, then consider one other piece of information. PlayStation Home offered an amazing private space for sale. It was by loot and it is a graphic and technological highlight. You buy the private space where you can walk around. It is so amazing as this is a new form of private space. Not only is it graphically superior on many levels, it has a new level of interactivity. The private space allows you to monitor twitter via a light bar in your apartment. It offers LOOT™ Radios (music) and EOD TV (movies, TV shows). This is a new era in entertainment, yet not everywhere available. They were very clear in communicating that part. I get that part! Yet, consider that Loot is part of Sony, and that the TPP is about to limit retransmissions of broadcasts even further, how long until consumers ‘lose’ those options? In addition some places cost US$2.99, whilst in Australia the same places cost AU$4.99 and in the UK GBP 2.39. So, when we set this all to the same (US) currency we see:

United States $2.99, Australia $4.61 (+54%), United Kingdom $4.19 (+40%). So not only do we pay on average a lot more, we get less for the overall package. Interesting how this lacks the visibility it deserves!

I wonder how much visibility the press and the news casts will give all this in the coming days. In my eyes it might be an interesting stretch to see how much power they have over the press, in case of the UK we should look at how much visibility they give all this. They claim that they could regulate themselves? Well, if this is true, how come that NO ONE (of the big newspapers in the UK) has had any visibly outspoken view on these matters by Sony? I saw a few sources like ‘reddit’ and other bloggers pick this up, but that is about it. If you are wondering on the size of these matters, I am not a journalist, I am not some high powered media mogul, I am just a blogger who knows games. The gaming industry encompasses a market in extent of 20 billion dollars a year. That is a market big enough for ALL newspapers to keep one eagle eye on any news that impacts it. No visibility seems to have been given at present. A questionable turn of events!

Who is looking out for the consumers, especially those who do not have that much to spend?