What has happened?

In February 2024, ASIC halted new offers of investments in Shield. ASIC made interim stop orders on four product disclosure statements for Shield (24-018MR).

In June 2024, ASIC took action to secure the assets held within Shield (24-129MR). ASIC sought the appointment of Jason Tracy and Lucica Palaghia of Deloitte as receivers and managers of the property of KAM. 

On 26 June 2024, Mr Tracy and Ms Palaghia of Deloitte were appointed by the Federal Court to take control of Shield’s bank accounts and provide a report on the financial position of Shield in July 2024 (24-137MR).

On 27 August 2024, the Federal Court made orders appointing Mr Tracy and Ms Palaghia of Deloitte as receivers and managers of the property of KAM.

The receivers are required to:

• secure the property held by KAM in its capacity as responsible entity of Shield and trustee of certain other funds
• identify how Shield investor funds were used by KAM, and
• recover Shield investor funds.

On 5 September 2024, the Federal Court made orders appointing Mr Tracy and Ms Palaghia of Deloitte as replacement voluntary administrators of KAM in addition to their role as receivers (24-197MR).

The administrators and receivers have commenced proceedings in the name of KAM against Paul Chiodo and Chiodo Corporation Pty Ltd, City Built Pty Ltd (City Built) and Mr Filippini (the director of City Built, who is involved in the construction of the developments) and related parties (Federal Court Proceeding VID978/2024). As part of this proceeding, the administrators and receivers have identified and obtained freezing orders over funds in bank accounts held by Mr Filippini and related entities.

On 2 December 2024, creditors of KAM resolved to wind up KAM and appoint Jason Tracy and Glen Kanevsky of Deloitte as joint and several liquidators.

A number of proposals were put to creditors on 2 December as an alternative to KAM being wound up. Having considered these proposals, the administrators were of the view that they were not in the best interests of creditors, unitholders or underlying investors in Shield and recommended that KAM be wound up (see reports dated 25 November 2024, 27 November 2024 and 30 November 2024 on Deloitte’s webpage).

The Shield fund remains under the management of the receivers and has not entered wind up at this stage.

It has come to ASIC’s attention that Venture Egg Financial Services Pty Ltd & United Financial Advice Pty Ltd t/as Venture Egg (Venture Egg) and Financial Services Group Australia Pty Ltd (FSGA) (financial advice firms who advised clients to invest in Shield) have issued the following letters to investors:

• Venture Egg letters dated 29 November 2024 and 2 December 2024, and
• FSGA letter dated 2 December 2024.

ASIC is concerned that the information in the letters is incomplete and some of the statements in the letters are inaccurate. Investors who have queries about their investment or the liquidation of KAM should contact the liquidators of KAM at shieldinvestors@deloitte.com.au. The Administrators’ independent assessment of the proposals put forward as an alternative to the winding up of KAM (which did not secure the support of the majority of creditors of KAM voting on its future) are available on Deloitte’s webpage.

Why has ASIC taken action?

Since 5 February 2024, investors have not been able to withdraw funds from Shield as KAM decided to suspend investor redemptions for Shield.

ASIC took Court action to protect investor funds while its investigation continues (24-129 MR) into concerns about the management and operation of Shield and the associated risks to investors.

ASIC is investigating whether significant investor funds may have been dissipated.

ASIC understands that, since February 2022, funds totalling more than $480 million have been invested in Shield by at least 5,800 consumers, who accessed Shield primarily through superannuation platforms the trustees for which were Macquarie Investment Management Limited (Macquarie) and Equity Trustees Superannuation Limited (Equity Trustees). The investigation to date suggests that potential investors were called by lead generators and referred to personal financial advice providers who advised investors to roll their superannuation assets into a retail choice superannuation fund and then to invest part or all of their superannuation into Shield.

ASIC has taken a range of Court actions in respect of KAM and in seeking orders from the Court, ASIC alleged that:

• KAM is the trustee of the Advantage Diversified Property Fund (ADPF), a wholesale property fund into which a large proportion of Shield’s funds has been invested
• the ADPF has made loans to various companies associated with Paul Chiodo (former director of KAM) to fund property development projects in Fiji, Italy, Port Douglas, and Melbourne
• substantial sums appear to have been spent on property developments without written contracts and in the case of the Port Douglas development, without the requisite development approvals to proceed
• there is a substantial shortfall when comparing the monies invested in the ADPF against the value of the assets of the ADPF, and
• investor funds may have been misapplied.

What is happening with my investment in Shield?

KAM decided to stop redemptions in Shield in February 2024 (KAM 02042024 - Notice to Members). Since that time, investors have not been able to access their funds.

Investors and creditors can contact the liquidators of KAM and receivers of Shield with any queries by emailing shieldinvestors@deloitte.com.au.

ASIC has published Information Sheet 45 which provides information for unsecured creditors of companies in liquidation (INFO 45).

People wishing to provide information to ASIC are invited to contact the investigation team via email at shield.queries@asic.gov.au.

Certain representatives of the following Australian financial services licence holders have provided financial advice recommending that clients invest in Shield.

If you have a complaint regarding the financial advice provided to you, you may wish to lodge a complaint with the relevant licence holder listed in the table below:

You may also wish to contact your superannuation trustee for further information about your investment. If you have concerns about your superannuation or investment platform provider, you may wish to lodge a complaint with the relevant entity listed in the table below:

You can access additional information on how to lodge a complaint on ASIC's Moneysmart website.

If your complaint is not resolved, you may wish to contact the Australian Financial Complaints Authority (AFCA). AFCA is an independent External Dispute Resolution scheme that deals with consumer and small business complaints about financial firms.

AFCA can be contacted by:

• phone on 1800 931 678, or
• lodging a complaint online at the AFCA website.

For further information in relation to resolving disputes with financial firms, please see ASIC’s Information Sheet 174.

What is ASIC going to do next?

ASIC is investigating the circumstances surrounding Shield. ASIC is investigating KAM and its directors and officers, the role of the superannuation trustees, the financial advisers who recommended investors invest in Shield, the lead generators, and others.  

The fact that ASIC is investigating any person or entity should not be construed as an indication by ASIC that the law has been broken.

We encourage you to check this webpage regularly for any further updates.

Key dates

There is no current hearing date.

3 December 2024 – Update for investors in the Shield Master Fund

ASIC notes the outcome of the second creditors’ meeting of KAM on 2 December 2024 at which creditors resolved to wind up KAM and appoint Jason Tracy and Glen Kanevsky of Deloitte as joint and several liquidators (24-265MR).

5 September 2024 – Court appoints voluntary administrators to Keystone Asset Management

On 5 September 2024, the Federal Court made orders appointing Mr Tracy and Ms Palaghia of Deloitte as voluntary administrators in addition to their role as receivers (24-197MR).

27 August 2024 – Court appoints receivers and managers to the property of Keystone Asset Management Ltd in its capacity as responsible entity for Shield

On 27 August 2024, the Federal Court appointed Jason Tracy and Lucica Palaghia of Deloitte as receivers of the property of Keystone Asset Management (Orders).

When handing down his reasons in relation to the appointment of receivers (Judgment – appointment of receivers), Justice Moshinsky stated:

“The extent of Keystone’s mismanagement confirms that there is a need to protect the interests of investors from what appear to be conflicts of interest and breaches of trusts…On the basis of the material before the Court, I do not have confidence that the SMF [Shield Master Fund] and ADPF [Advantage Diversified Property Fund] are being managed in the best interests of investors, or that Keystone is capable of providing such management…there are real doubts about the status and value of investments in the SMF and ADPF.”

On 28 August 2024, Keystone Asset Management’s directors appointed Scott Langdon, John Mouawad and Michael Korda of KordaMentha as voluntary administrators of Keystone Asset Management.  

On 30 August 2024, ASIC filed an application seeking orders including:

1. that the voluntary administration of Keystone Asset Management end and that Jason Tracy and Lucica Palaghia of Deloitte be appointed as provisional liquidators of Keystone Asset Management; or alternatively
2. that Scott Langdon, John Mouawad and Michael Korda of KordaMentha, the voluntary administrators of Keystone Asset Management be replaced by Jason Tracy and Lucica Palaghia of Deloitte.

26 June 2024 – Court appoints independent party to verify payments made from the Shield Master Fund

The Federal Court has appointed Jason Tracy and Lucica Palaghia of Deloitte to have full control of the bank accounts of the Shield Master Fund (Shield).

For more information please see ASIC’s media release 24-137MR.

18 June 2024 – Federal Court freezes assets of Shield Master Fund

ASIC has obtained interim orders from the Federal Court freezing the assets of the Shield Master Fund (Shield), a registered managed fund whose responsible entity is Keystone Asset Management.

For more information please see ASIC’s media release 24-129MR.

7 February 2024 – ASIC halts offers of Shield Master Fund

ASIC has made interim stop orders on four product disclosure statements (PDSs) for classes of units of the Shield Master Fund (ARSN 650112057) (Fund), a registered managed fund promoted by Keystone Asset Management.

For more information please see ASIC’s media release 24-018MR.

Further support is available if you need it

We understand this may be a confusing or worrying time for you.

If you are experiencing financial difficulty, you can speak to an independent financial counsellor for free by contacting the National Debt Helpline (NDH) on 1800 007 007 (9:30am to 4.30pm in your local Australian time zone, Monday to Friday). The NDH may not be able to assist with your SMSF specifically.

You can also find a financial counselling agency using the map on ASIC’s Moneysmart website.

If you are experiencing distress and would like to speak to someone, further support is available at:

• Lifeline: 13 11 14 (24 hours)
• Beyond Blue: 1300 22 46 36 (24 hours)

How can I receive further updates?

ASIC’s investigation into the conduct of Keystone, its officers, representatives and related entities in connection with the Shield Master Fund is continuing.

ASIC will publish further updates on this webpage.

Any person who is concerned they have invested in Shield or who wants to provide information to ASIC can contact ASIC’s investigation team by email at shield.queries@asic.gov.au.

Relevant Media Releases

• 24-018MR ASIC halts offers of Shield Master Fund
• 24-129MR Federal Court freezes assets of Shield Master Fund
• 24-137MR Court appoints independent party to verify payments made from the Shield Master Fund
• 24-197MR Court appoints receivers and new voluntary administrators to Keystone Asset Management
• 24-265MR Update for investors in the Shield Master Fund