ASIC obtains 20-year ban for Mayfair 101 director James Mawhinney
The Australian Securities and Investments Commission (ASIC) has secured a court order restraining Mayfair 101 director James Mawhinney from promoting and raising funds through financial products for 20 years.
The Mayfair 101 Group offered investments in multiple financial products including M Core Fixed Income Notes (Core Notes), M+ Fixed Income Notes (M+ Notes), the IPO Wealth Fund, Australian Property Bonds and IPO Capital. The companies that offered the Core Notes and the IPO Wealth Fund are in liquidation and redemptions in the remaining products have been suspended since March 2020. Approximately $211 million is owing to Mayfair 101 Group investors.
Justice Anderson found Mr Mawhinney has been ‘involved in multiple contraventions’. Mr Mawhinney’s conduct can be characterised as ‘serious, incompetent and reckless and displaying a propensity for conduct in disregard of the requirements of financial services laws.’
Justice Anderson found Mr Mawhinney engaged in conduct that entailed ‘inherently problematic, risky and fatally flawed’ investment schemes in relation to the IPO Capital, Core Notes, M+ Notes and IPO Wealth Fund products. His Honour also found Mr Mawhinney ‘has expressed no contrition or remorse for the very significant loss of investors’ funds’.
The Court restrained Mr Mawhinney (himself, or through any company of which he is an officer or shareholder) from advertising investments and seeking or accepting funds from the public in connection with any financial product, for 20 years. The injunctions will prevent Mr Mawhinney from advertising and raising further funds through both the existing Mayfair 101 products as well as any new financial products in future.
The Court also restrained Mr Mawhinney from removing from Australia any assets acquired with funds received from the public for investments in financial products for 20 years, without a court order.
This follows the 23 March 2021 decision of the Federal Court that found that companies in the Mayfair 101 Group made statements that were false, misleading or deceptive in advertisements for its debenture products. A penalty hearing for that proceeding has been listed for 20 July 2021.
Mr Mawhinney was ordered to pay ASIC’s costs of the application for the injunction.
ASIC’s investigation into Mr Mawhinney’s conduct is continuing.