Australian Securities Exchange (ASX)-listed firm Fiducian Investment Management Services Limited (FIMS) has been ordered by the Supreme Court of New South Wales to pay a $7.3 million penalty for breaching its duty of care as a responsible entity and making misleading environmental, social, and governance (ESG) statements.
The judgment, handed down on 11 August 2026, found that FIMS failed to act with appropriate care and diligence regarding its Diversified Social Aspirations Fund. The court determined that FIMS made misleading representations concerning the fund’s ethical investment objectives and falsely claimed it conducted routine monitoring to ensure holdings aligned with its public statements.
The proceedings related to the operation of the fund between October 2019 and May 2024, during which time it invested through underlying funds that held stakes in companies deriving revenue from fossil fuels. Product disclosure statements issued across that period claimed the fund avoided harmful activities and specific excluded industries, assertions the court found FIMS made without reasonable grounds.
The ruling highlighted significant governance and oversight deficiencies, noting that FIMS failed to monitor underlying investments, review underlying fund strategies, adjust holdings, or amend the fund’s stated objectives to reflect actual exposures. The court observed that investor concerns regarding the fund’s holdings had been raised as early as 2019 without appropriate corrective action from management.
Australian Securities and Investments Commission (ASIC) Chair Sarah Court noted that retail investors were deprived of the ability to make informed decisions and emphasized that sustainability claims must be supported by robust operational oversight.
The case marks ASIC’s fourth civil penalty outcome related to greenwashing, and the first against a managed fund operator specifically addressing governance and compliance failures concerning duty of care obligations.
