ASIC secures 20-year ban for Mayfair 101 director James Mawhinney from fundraising and promoting investment products

‘In Justice Anderson’s decision, we hear loud and clear the voices of eight Australian investors who’ve lost hundreds of thousands of hard-earned savings.

False

Misleading

Mistaken

None of them have lost money. No write-offs or write-downs have occurred. The notes exist. This is a fundamental characteristic of debt which ASIC and Ms Chester has not appreciated.

The responsibility for the losses and the egregious harm to investors is, as the judgment makes clear, all down to the contumelious actions of Mr Mawhinney.’

Defamatory

This statement should be retracted by Ms Chester and ASIC. ASIC's attack on the group is what has caused harm and this is becoming more obvious as time has passed. Mayfair 101 and our lenders ought to be compensated for the misconceived campaign against our business.

the business models for these products were flawed from the outset

Clarification

Borrowing money to finance business growth is not a flawed business model. It happens every day around the world, including in Australia.

This action is one of several under ASIC’s ‘True to Label’ project targeting investment managers and issuers of other financial products who have lured unsophisticated investors into high risk products via misleading marketing.

Every Mayfair client complied with statutory requirements under the Corporations Act. They were not 'lured' in...they contacted Mayfair after seeing advertisements and made a decision of their own free will to subscribe.

‘These are large investor losses, approximately $211 million, on the back of multiple product failures across the Mayfair 101 Group.

This is a particularly false and defamatory statement for Ms Chester to make. It was made around the same time she was attempting to get James Shipton's job as Chairperson. No losses have occurred. The debt instruments still exist, are recognised by Mayfair (the borrower) and the client (the lender), and in time are capable of being repaid. No liquidator has declared a loss (or even a final outcome). Ms Chester and ASIC ought to retract the statement.

ASIC Deputy Chair Karen Chester said ‘ASIC has succeeded in its cases against both Mayfair 101 and Mr Mawhinney, after a successful outcome in the Federal Court in March this year on misleading and deceptive advertising.

Outdated

So far ASIC has not had a win at a contested hearing. Rather, it has had losses at contested hearings on Mayfair matters. The misleading or deceptive conduct case was uncontested at trial and the case against Mr Mawhinney was overturned on appeal.

ASIC’s investigation into Mr Mawhinney’s conduct is continuing.

ASIC has been investigating Mr Mawhinney for four years. They have all the bank statements and documents and no action has been taken because no action is warranted.

This ban was overturned on appeal. The case has been remitted to be re-heard at a trial commencing 21 October 2024