Mayfair 101 director, James Mawhinney, has been given a 20-year ban from promoting and raising funds through financial products by the Federal Court.
The decision followed proceedings brought by the Australian Securities and Investments Commission (ASIC) on 7 August, 2020. Last month, companies in the Mayfair 101 Group were found to have made false, misleading, or deceptive statements in its debenture products advertisements.
Federal Court Justice Anderson found Mawhinney had been involved in multiple contraventions and that his conduct could be characterised as “serious, incompetent and reckless and displaying a propensity for conduct in disregard of the requirements of financial services laws”.
Anderson said there was a high likelihood that Mawhinney, or entities controlled by him, would engage in similar conduct if not prevented by the court from doing so.
“Mr Mawhinney’s conduct can accurately be described as reprehensible conduct which demonstrates a complete disregard for financial services laws and, as a consequence, places the public at great risk of financial loss should Mr Mawhinney not be restrained by the form of injunction sought by ASIC,” Anderson said.
In relation to the IPO Capital, Core Notes, M+ Notes, and IPO Wealth fund products, Anderson found Mawhinney engaged in conduct that was “inherently problematic, risky, and fatally flawed”. The companies that offered the Core Notes and the IPO Wealth Fund were in liquidation and redemptions in the remaining products had been suspended since March 2020.
He noted that Mawhinney had not expressed contrition or remorse for the very significant loss of investor funds.
Currently, $211 million was owed to Mayfair 101 Group investors, and Anderson found Mayfair Wealth Partners, which promoted the Australian Property Bonds, took $100,000 from an investor without issuing the investor with the product or contacting the investor.
“Such conduct is reprehensible. No competent, fair or reasonable financial services provider takes money from an investor without having proper administrative procedures in place to ensure the relevant product is issued to the relevant investor,” he said.
The court also restrained 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.
ASIC deputy chair, Karen Chester, said: “Justice Anderson’s decision makes clear why ASIC brought this action and that the business models for these products were flawed from the outset. 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”.