MWL Financial Group and its managing director Nicholas Maikousis have lodged an urgent legal challenge against the Australian Securities and Investments Commission (ASIC) after the regulator cancelled the firm’s licence and banned Mr Maikousis from the financial services industry for 10 years.
Regulator’s decision
ASIC announced this week it had taken enforcement action in connection with the Shield Master Fund, which attracted hundreds of millions of dollars in investments.
The regulator found that MWL operated what it described as a “low-cost advice project,” which channelled client superannuation savings into the fund. Between September 2021 and February 2024, more than 750 clients allegedly invested a combined $155 million into Shield through MWL.
ASIC said MWL provided template advice documents that included misleading performance information, failed to properly assess the fund before approving it for clients, and had undisclosed bonus arrangements with advisers recommending Shield, among other things.
Deputy Chair Sarah Court said: “Failing to manage conflicts has the potential to cause consumers to be given financial product advice that may not suit their needs.”
Lawyers respond
On Thursday, SLF Lawyers, acting for MWL and Mr Maikousis – who is also President of South Melbourne FC -, lodged an application with the Administrative Review Tribunal seeking an urgent review and a stay of the ban.
Senior Partner John Gdanski said the action was unusual for someone “who has worked 35 years with an unblemished record.”
He added: “While the review into my client’s ban is underway, ASIC should focus their powers on ensuring the major institutions along with those trustees and research houses involved in this Shield fiasco that misled financial advisers be held accountable.”
Next steps
The legal team is seeking to allow Mr Maikousis to continue working in financial services pending the outcome of the Tribunal’s review.
ASIC’s broader investigation into Shield is ongoing, including civil proceedings against other entities connected to the fund.
