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).

The 26 June 2024 Court orders prevent Keystone Asset Management Ltd (Keystone Asset Management), the responsible entity for Shield, from selling, transferring, or dealing with Shield’s assets, other than to make certain payments that must first be approved by Deloitte.

ASIC took this 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. Some of these concerns include:

• Keystone Asset Management has failed to lodge Keystone Asset Management’s and Shield’s audited FY2023 financial statements,
• a large proportion of the funds held by Shield have been directed to a fund which made loans to various companies associated with Mr Paul Chiodo, a former director of Keystone Asset Management to fund property developments, and
• ensuring there is independent oversight with respect to any payments going forward.

As part of the court appointment, Mr Tracy and Ms Palaghia:

• will have to assess whether payments are in the best interests of Shield investors, and
• prepare a report on the financial position of Shield by 23 July 2024.

The matter will be back before the Court in August at a date yet to be fixed.

Mr Chiodo also provided an undertaking to the Court to give ASIC written notice 14 days prior to any international travel and to take all reasonable steps to comply with any notices issued by ASIC in the event he is travelling overseas. Travel restraint orders previously made by the Court on 18 June 2024 have been vacated.

Download

Orders made on 18 June 2024 have been replaced by the following orders:

Orders – Keystone Asset Management (PDF 1 MB)

Orders – Mr Chiodo (PDF 86 KB)

Background

Shield is a registered managed fund, which was registered in May 2021.

Shield remains closed to new investments. ASIC took action in February 2024 to halt new offers of investments in Shield by making interim stop orders on four product disclosure statements for Shield (24-018MR).

In February 2024, Keystone Asset Management decided to halt redemptions from Shield, according to a notice published on Keystone Asset Management’s website. 

If you have invested in Shield via a superannuation or an investment platform, you can obtain information about what this means for your investment from the providers below:

The ASIC investigation team can be contacted by email at shield.queries@asic.gov.au.

Editor's note:

The matter has been listed for a further hearing in the Federal Court in Melbourne on Tuesday, 27 August 2024.

Editor's note 2:

An interlocutory application has been filed by Jason Tracy and Lucica Palaghia of Deloitte which will be heard on 15 August 2024 at 9:30am in the Federal Court of Melbourne.

Editor's note 3:

On 15 August 2024, the Federal Court heard an interlocutory application made by Jason Tracy and Lucica Palaghia of Deloitte (Orders).

Editor's note 4:

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).

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.  

The matter is listed for mention on 30 August 2024 at 1:15pm at the Federal Court.

Editor's note 5: 

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

• 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
• 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.

The matter is listed for hearing on 5 September 2024 at 10:15am at the Federal Court.

Editor’s note 6:

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).