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The corporate regulator has applied to the Supreme Court of NSW to wind up Capital Guard AU Pty Ltd on "just and equitable grounds", seeking appointment of an independent liquidator to investigate the firm's affairs and recover assets for around 80 investors who tipped $17.4 million into the business.
The Australian Securities and Investments Commission (ASIC) says only a "small proportion" of the $17.4 million raised from investors remains in known bank accounts and payment platforms, raising serious concerns about how the bulk of the funds were deployed.
"ASIC has taken this action because it has serious concerns about Capital Guard’s management, the handling of investor funds, and whether particular bonds offered to investors existed as represented," says the regulator.
The wind-up application follows ASIC's cancellation of Capital Guard's Australian financial services licence on 29 June this year after the regulator found the firm had engaged in dishonest conduct, including promoting a non-existent Macquarie Bank bond from which at least $100,000 was obtained from investors.
ASIC determined Capital Guard had not complied with its financial services laws and was not fit to hold a licence.
Among the regulator's key concerns are that Capital Guard appears to have promoted bond investments that may not have existed or may not have been available for investment as represented and that investor funds appear to have been used in ways that are "inconsistent with how Capital Guard told investors those funds would be invested".
ASIC further alleges that Capital Guard appears to have provided false information to its auditor and that the company failed to comply with a range of regulatory and reporting obligations.
Capital Guard had held its financial services licence since 15 August 2017, although ASIC notes the firm's current management acquired the previous financial services business operating under the licence in 2024.
The regulator is now seeking court-appointed liquidators to trace and recover investor funds, examine the company's books and records, and determine where the missing money went.
ASIC has called for the appointment of Robert Kirman and Jacinta Nielsen of McGrathNicol as joint and several liquidators of Capital Guard.
A directions hearing in the matter is listed for Monday 20 July.
Imposter bond scams, in which fraudsters use the names of well-known financial institutions to lend credibility to fake investment products, have been a persistent concern for regulators.
Earlier this month, ASIC placed Capital Guard on its Moneysmart Investor Alert List following the cancellation of the AFS licence and the company's website has been taken down.
The government's Moneysmart website warns investors that scammers frequently impersonate legitimate banks and fund managers to sell bonds that do not exist, often targeting retail investors with the promise of above-market returns.
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