ASIC Expands Probe, Sues Directors of Failed $530 M Shield Fund
Synopsis
Australia's corporate regulator is suing several directors and a compliance committee member linked to the collapsed Shield Master Fund, extending its investigation into one of the country's largest recent investment failures.
ASIC is suing the company’s former directors and the compliance committee of Keystone Asset Management in response to the collapse of the company's Shield Master Fund.
ASIC alleges former Keystone officers, with respect to the management of an Australian managed investment scheme which held more than A$530 million for about 5,800 investors, before it was liquidated in early 2024, failed in their duty of care.
ASIC is seeking court ordered pecuniary and civil penalty orders, disqualification of officers, and recovery of legal costs.
In the documents filed with the Court, ASIC alleges some of the money from the Shield Master Fund were paid to related property development fund entities, before money was then paid to companies connected to former directors, Paul Chiodo and Ilya Frolov.
ASIC alleges that several transactions relating to this payment were entered into without appropriate security, independent valuation or the necessary proper governance processes.
ASIC expands legal action over Shield fund
The ongoing proceedings form part of ASIC's broader efforts to strengthen the Australian investment industry ASIC reports having over 26 ongoing enforcement investigations or matters in the Federal Court, including in respect of Keystone and The Shield Master Fund as well as the linked First Guardian investment schemes.
Earlier this year the Federal Court ordered that Macquarie Investment Management had failed to comply with the Corporations Act in relation to its management of the Shield options and since then, ASIC has reported that A$321m has been paid to over 3,000 investors as part of Macquarie's remediation plan.
ASIC's Deputy Chair, Sarah Court stated: "ASIC will continue to pursue those that it considers failed to discharge their legal obligations and will continue to maintain a focus on asset protection for those impacted wherever it is able."
Part of a wider enforcement program
The ASIC proceedings follow reports of greater regulatory scrutiny of Australian superannuation products following the recent Annual Superannuation Bulletin 2024-25 produced by the Australian Prudential Regulation Authority (APRA).
According to this latest publication, Australia is home to A$4.3 trillion in total assets within its superannuation market as at June 30, 2025. Australia is the fourth largest in the world for pension funds with such assets only falling behind the United States, Japan and Canada.
Australia and the United Kingdom, The Netherlands and New Zealand, the fourth, sixth and eleventh largest pension fund markets, respectively have A$1.67, A$586 billion and A$463bn respectively in their schemes.
The proceedings related to this article involve Australian Keystone Asset Management, which is unrelated to Keystone Asset Management, a property asset management and advisory firm based in the USA.
Source: AFR
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Pooja Malik is a business journalist with over six years of experience covering startups, entrepreneurship, and emerging trends. She has previously worked with leading media platforms such as YourStory Media and BW BusinessWorld, where she reported on business, policy, and market developments. Currently, she serves as Editor at The Inspirepreneur Magazine, where she writes and edits stories across business, lifestyle, and travel, with a focus on clarity, accuracy, and reader relevance.
