A company accused of overseeing thousands of Australians being exposed to dodgy super funds says it will vigorously defend a lawsuit against the financial watchdog.
InterPrac is accused of failing to ensure representatives they authorised were complying with the law when they recommended 6843 clients invest around $677 million in two now-collapsed funds.
Shield Master Fund and First Guardian Master Fund were liquidated earlier in 2025 after investigators found multiple alleged examples of poor oversight and regulation by multiple firms including InterPrac.
After suspending the trading of its shares on the ASX on Wednesday, InterPrac's parent company, Sequoia Financial Group, denied breaching any of its legal obligations.
"The InterPrac board and support staff are committed to continue to act in clients' best interests and take our compliance and governance obligations seriously," Sequoia chief executive Garry Crole said.
After carefully considering the claim made by the Australian Securities and Investments Commission, Sequoia says it will defend any court action.
Both Shield and First Guardian allegedly had exorbitant fees, opaque investments and delivered millions of dollars in payments to Venture Egg and its boss Ferras Merhi, one of InterPrac's former authorised representatives.
"No competent financial adviser could have recommended investment in Shield or First Guardian," ASIC said in Federal Court documents lodged on Wednesday.
The court documents say Mr Merhi told InterPrac in June 2024 that companies he controlled received nearly $20 million from the two funds.
"Despite this, InterPrac permitted Venture Egg and Merhi to remain as its authorised representatives until 31 May 2025," ASIC said.
Investors may not have even agreed to having their super savings transferred into the dodgy funds after InterPrac allowed Venture Egg to use "negative consent" to alter portfolios.
The practice allows advisers to adjust their client's investments by issuing a statement saying the client would consent unless they explicitly said otherwise.
The collapse of the funds has been one of ASIC's most complex cases, with the regulator saying more than 40 investigators are working full-time to bring those responsible for the losses to justice.
"What we are talking about here is an industrial-scale misconduct that involved a range of players," ASIC deputy chair Sarah Court told reporters on Wednesday.
"We are very methodically working through them in order to make sure ... we hold those companies and individuals involved to account."
The regulator is also initiating legal action against fellow advice licensee MWL and research house SQM for their roles in duping unsuspecting customers.
ASIC has launched a separate legal case against Mr Merhi alleging he engaged in unconscionable conduct and failed to act in the best interests of clients while receiving millions of dollars.
People who invested in Shield or First Guardian should contact the respective liquidators for updates on recovering investments and may be entitled to lodge a complaint with the Australian Financial Complaints Authority.
The case against InterPrac will return to the Federal Court at a later date.
