The Australian Securities and Investments Commission (ASIC) told the ABC it was "actively investigating" whether there were "oversight, due diligence, and compliance failures" related to MGF Capital's corporate authorised representatives. "ASIC is concerned many investors may have been exposed to significant financial losses," a spokesperson said.
MGF Capital holds an Australian Financial Services Licence (AFSL), and its sole director is Matthew Starkey, a former Goldman Sachs trader. Under the licensing scheme, AFSL holders can act as licensors, supplying an effective sub-licence to companies that become their authorised representatives. Corporate records show Main Group FX was an authorised representative of MGF Capital between February and December 2023.
The ABC reported that Main Group's investment portal shut down, emails bounced, staff became uncontactable, and the company was eventually deregistered.
Mr Starkey declined an interview and referred the ABC to a lawyer and crisis PR manager, who denied any due diligence failures had occurred but would not say what checks were carried out before Main Group became his licensee. In a statement, Mr Starkey said his firm "had no contact with any of the perpetrators of the [alleged] scam". He said it was "critical to distinguish" between the Main Group his firm authorised and a separate group of scammers impersonating the company. The ABC said it had encountered no evidence of two separate groups and that Mr Starkey did not provide further information when asked.
The ABC reported that Candice Driver, a Sydney marketing executive, is among 13 investors who collectively lost more than $2 million to Main Group FX. Ms Driver told the ABC she invested tens of thousands of dollars in 2023 believing she was trading commodities. She said monthly dividends arrived late, then not at all, and she could not withdraw her cash. Ms Driver said she was glad ASIC was investigating but had "no trust whatsoever" in a system that allowed alleged fraudsters to hold a financial licence. "Which, as Australians, we're told to trust," she said.
Ms Driver reported MGF Capital to the Australian Financial Complaints Authority (AFCA), the external dispute resolution body for financial complaints. Within days, Mr Starkey emailed her urging her to withdraw the complaint: "If you could make contact with them [AFCA] and explain you are in the process of resolving the matter that would be great." According to the ABC's account, Main Group's chief executive, Karim Farag, also called her, saying her complaint was blocking company funds. Ms Driver said it was the last she heard from him. The ABC reported that she and Mr Starkey remain locked in a long-running AFCA dispute.
The ABC also raised questions about the veracity of at least one Main Group director. Junru Sun, a 21-year-old international student, was listed as the company's first director in February 2023 for one month only, and told the ABC she had no idea how her name ended up on the documents. Mr Starkey said Ms Sun "met the relevant regulatory requirements" to direct an authorised representative. The directorship later switched to a Lebanon-based woman, Robin Mahfouz, who refused to speak to the ABC. MGF Capital said it "did not learn of the change in directorship" until afterwards.
By January 2024, MGF Capital had cancelled its AFCA membership, stripping the complaints body of the power to order compensation in future claims. Membership is optional for licensees dealing only with "wholesale" clients, such as sophisticated investors or large companies. Ms Driver called the arrangement a "huge and unbelievable loophole". AFCA said membership "is dependent on the financial services a firm is licensed to provide", and that where a firm is not legally required to be a member, it cannot be compelled to join.
The ABC reported that other investors were shut out of the complaints path. According to its report, Adelaide man Lewis Murray lost $390,000 and tried to lodge a complaint in early 2024, after MGF Capital had already withdrawn from AFCA. Perth retiree Jean Giles sold her home after losing $176,000 to Main Group FX; she was also too late.