First Guardian founder boasted of ethics, warned against funds with no external oversight, years before $450m super savings collapse

‘If you’re not going to put your mum’s money in it, why would you put in someone else’s?’ Falcon Capital founder Simon Selimaj said to prospective investors in the First Guardian Super Fund.

Falcon Capital founder Simon Selimaj boasted of ethics on a podcast years before the First Guardian Master Fund collapse.

The founder of the First Guardian Master Fund boasted of his ethical credentials years before he and his partner struck a deal with advisers that would lure more than $600m into the now failed strategy, most of it lost.

Simon Selimaj, 63, even invoked convicted fraudster Bernie Madoff when detailing to prospective investors how important it was to have external supervision of a fund’s activities.

Madoff ran the world’s largest Ponzi scheme, worth an estimated $65bn, before it collapsed and he died in jail.

First Guardian has been accused of operating like a Ponzi scheme, with alleged falsified returns, pooling of investor funds and a set-up that paid redemptions from new investor money, according to a liquidators report published this week.

“You’ve all heard of Bernie Madoff. The reason he got away with it is because he was the fund manager, but he was also the administrator; he was doing his own internal accounting. And when you’re not independent, you can get away with anything,” Mr Selimaj said on an Islamic banking and finance podcast hosted by La Trobe University.

“It’s a cross-check system, so no one can do anything untoward with the money, like do a runner or something like that,” Mr Selimaj said on the podcast, which is undated, but recorded apparently several years ago.

Falcon Capital was the responsible entity for First Guardian. Mr Selimaj, also known as Simon Sallka or Simon Sokol, and David Anderson were longstanding directors of the firm.

Both men also ran all of the First Guardian funds which collapsed earlier this year, locking 6000 investors out of $450m of superannuation savings.

Falcon capitalised on the marketers and financial advisers who funnelled new investors into the now failed strategy with false promises of high returns in liquid investments, the firm’s liquidators concluded.

In reality, virtually all of the money went to illiquid assets, loans to related parties and even a $500,000 Lamborghini, liquidators Ross Blakeley and Paul Harlond said in the report, published late on Tuesday.

They were the ones who discovered client redemption requests were met by cash funnelled from applicants.

In the same podcast, Mr Selimaj repeatedly emphasised the importance of having an ethical mindset when investing.

“If you’re not going to put your mother’s money in it, why would you put in someone else’s? You have to think from that perspective,” Mr Selimaj said.

Operating menu of the Lamborghini Urus identifying Simon Selimaj by his known other name. Source: Slattery Auctions

He bragged of his years of investment experience across top investing houses Brown Brothers Harriman, The Trust Company and Colonial Mutual before he left the major players to set up Falcon Capital and the First Guardian funds.

The strategy he was promoting in the podcast, First Guardian Super, was marketed as a Shariah-compliant super fund, meaning it followed faith-based rules including avoiding investments in alcohol or gambling, and investments that charged or paid interest.

There is no record with either the ATO or APRA of First Guardian Super being a registered super fund, only a business name, raising further questions as to where the capital went and how it was managed and regulated.

First Guardian Master Fund investors fear they have lost as much as $446m. The master fund invested in breweries, restaurants and charged interest on loans.

Mr Selimaj showed disdain for financial planners saying: “I’ve never been a stockbroker, they’re sharks. I’m not involved in financial planning, they’re used car salesmen.”

Years later he would link up with Venture Egg’s Ferras Merhi, who advised thousands of clients to allocate their wealth to First Guardian.

“Thank Allah, from the age of 21 I’ve been a fund manager. And when you’re a fund manager, you’re at the pinnacle, and information comes to you. You treat it with humility. You don’t treat anyone with a sense of arrogance. And what goes around comes around,” Mr Selimaj said.

As revealed by The Australian in March, First Guardian invested hundreds of millions of dollars in companies associated with Mr Anderson, including celebrity chef Scott Pickett’s restaurant empire, Tasmanian craft brewery Fox Friday, and an Indonesian property finance firm run by the fund’s former head of private equity.

Falcon allegedly kept pumping money into illiquid investments even after suspending the fund last year, according to the securities regulator, which has taken legal action against the business and obtained freezing and travel orders against Mr Anderson and Mr Selimaj.

Falcon Capital director and former First Guardian CEO David Anderson.

Melbourne-based Mr Anderson used investor money for his personal benefit, including to pay the mortgage on his lavish $9m Hawthorn home, ASIC alleges.

The Lamborghini Urus, purchased by Falcon in 2023, was found in the possession of Mr Selimaj.

Falcon Capital awarded more than $45m to three marketing and lead generation companies between 2021 and 2023, with more than half of the money allegedly siphoned directly from First Guardian fund assets, according to the corporate regulator.

It this month warned consumers to be on alert for high-pressure sales tactics, click-bait advertising and promises of unrealistic returns.

The warnings follow the collapse of not just First Guardian but also the failed Shield Master Fund. Combined, about 12,000 investors could lose as much as $1bn.

ASIC deputy chair Sarah Court has said the regulator is also looking at the role Macquarie, Equity Trustees and others played in hosting the funds on their platforms.

“In our view, you have an obligation to make sure that what is being offered through your platform is fit for purpose and appropriate for investors,” Ms Court said. “We are certainly investigating Macquarie and Equity Trustees and considering what options ASIC has available to hold them to account for what we think are failures.”

Originally published as First Guardian founder boasted of ethics, warned against funds with no external oversight, years before $450m super savings collapse