Netwealth shares rose 1.07% to $32.17 by midday trade after the wealth manager said it has sought government assistance to reimburse customers affected by the collapse of the First Guardian Master Fund.
The $8 billion group said its subsidiary, Netwealth Superannuation Services (NSS), lodged an application on Friday with Financial Services Minister Daniel Mulino for financial assistance. About 1,088 Netwealth members lost approximately $101 million. Any assistance granted would be used to restore the fund and compensate impacted members, the company told investors on Monday.
Netwealth said it considers Falcon Capital Limited—the entity behind First Guardian—to have engaged in fraudulent conduct that led to losses in the Netwealth Superannuation Master Fund. It added that it believes fraudulent conduct by other entities and individuals also contributed to the losses. ASIC is investigating various entities and individuals in connection with the events, including Netwealth. Separately, Macquarie is the only institution to have approached ASIC with a $321 million compensation proposal for its customers while acknowledging failures.
Netwealth maintains it complied with all relevant laws in making the First Guardian Master Fund available on its platform. However, it said that if a claim against the company is established, it has the resources to meet any resulting legal or monetary obligations.