ASIC Sues Auditeo Over Alleged Audit Failures in First Guardian Case
The Australian Securities and Investments Commission (ASIC) has filed legal action against Auditeo Australia, along with two of its auditors—Ajm Didarul Islam Khan and Brian Robert Taylor—for alleged audit failures related to the managed investment scheme First Guardian Master Fund. ASIC claims that unqualified audit reports issued for 2020–24 were 'false or misleading' under section 1308(5) of the Corporations Act, due to insufficient audit work and lack of reasonable basis. The regulator alleges significant breaches of auditing standards by Auditeo and its auditors. For example, in 2021, ASIC claims there was no evidence that a financial audit had occurred before an unqualified report was issued. In the following years, large portions of reported assets—up to A$170 million in 2023—were not tested at all by Auditeo and Khan. ASIC's action is part of its broader enforcement strategy targeting accountability for First Guardian’s collapse, which affected over 6,000 investors with potential losses up to A$446 million. The regulator seeks court orders including declarations of contravention, penalties, and injunctions.