Mayfair 101 Group to pay $30M penalty for misleading advertising
The Australian Securities and Exchange Commission (ASIC) announces that the Federal Court has ordered four companies in the Mayfair 101 Group to pay a combined penalty of $30 million for misleading advertising.
In March 2021, the Court found Mayfair Wealth Partners Pty Ltd and Online Investments Pty Ltd (trading as Mayfair 101), M101 Nominees Pty Ltd and M101 Holdings Pty Ltd engaged in misleading or deceptive conduct and made false or misleading representations when promoting the M+ and M Core Fixed Income Notes.
Mayfair 101 Group products were advertised in newspapers, on websites and via Google search advertising, when potential investors searched for terms such as ‘bank term deposits’ and ‘best term deposit’.
The Court found that the Mayfair companies represented that:
- the Notes were comparable to, and of similar risk profile to, bank term deposits, when they were of significantly higher risk,
- the Notes carried no risk of default, when in fact there was a risk that investors could lose some, or all, of their principal investment,
- the principal investment would be repaid in full on maturity, when this might not occur because Mayfair could extend the time for repayment for an indefinite period, and/or
- the M Core Notes were fully secured products when they were not.
The breakdown of the penalties is as follows:
- Mayfair Wealth Partners: $10 million
- M101 Holdings: $8 million
- M101 Nominees (in liquidation): $8 million
- Online Investments: $4 million
In handing down the decision, Justice Anderson found that, ‘the Defendants deliberately mislead investors into investing in the Mayfair Products under the belief that they would be of low risk when in fact the Mayfair Products were highly speculative and carried very substantial risk.’
The Court also permanently restrained the companies from using certain words and phrases (such as ‘term deposit’ and ‘certainty’) in any future advertising.