Mayfair 101 Group is contesting a combined penalty of $30 million ordered against four companies within the group late last year.
The penalty relates to misleading advertising by Mayfair Wealth Partners ($10 million) and Online Investments (trading as Mayfair 101 – $4 million), M101 Nominees ($8 million) and M101 Holdings ($8 million) when promoting the M+ and M Core Fixed Income Notes in March this year.
The products were advertised in newspapers, on websites, and through Google search advertising.
The court found that the notes were promoted as comparable to and of similar risk profile to bank term deposits when they were of significantly higher risk and that they carried no risk of default when there, in fact, was a risk that investors could lose some or all of their principal investment.
Meanwhile, Mayfair managing director James Mawhinney is challenging a 20-year ban on dealing in financial products which was imposed last April.
In the ruling, Justice Anderson found that Mr Mawhinney had shown no remorse “for the loss and harm caused to investors in the Mayfair products”.
Mr Mawhinney issued a statement on the appeal submissions on Friday, 8 April.
“The events of the past two years have been a shocking experience, it is almost surreal what has occurred,” he said.
“Nearly 600 Australians who entrusted Mayfair 101 with their funds have had their lives and wellbeing put on hold while we respond to the allegations against us with one hand tied behind our back.
“It is a terrible situation that might well have been avoided if a more conciliatory and careful approach had been taken by ASIC.”
Both appeals are scheduled to be heard over five days starting from Monday, 22 August 2022.
“A favourable outcome in these appeal cases will allow us to rebuild and set a course for our investors to be made whole,” Mr Mawhinney said.
His 20 year ban seems a touch light given his age
Mawhinney did not create these products primarily to benefit investors. Instead, they were designed as cheap loans to finance his grandiose and risky dreams, offering investors a fraction of the interest rate that his ventures would normally attract, and giving them none of any upside profit. And investing in highly illiquid assets such as derelict islands that would take years to develop, meant that there would be little income or capital flowing back to pay interest or redemptions, so that these had to be met from new investor money. From the very start, his snake was eating its own tail. This was never clearly disclosed to investors.
No investment firm creates products primarily to benefit investors.
So true guys and well said James. A bad culture exists within Asic where they’d prefer to just go for the kill without a care in the world for those investors they are meant to be protecting . They love easy targets (like Mawhinney) for point scoring & often do so with breathtaking arrogance.
Easy targets like Advisers often just trying to do the best by their clients, only to be banned for being late sending a statement out, or using common sense when it comes to strategies & recommendations instead of ASIC’s cookie-cutter preferences? Yes.
I disagreed with some of the advertising of Mawhinney’s company, though let’s be honest – unless you’re an Industry Super Fund or a financial advice “guru” (looking at you Barefoot & Whittaker) – you can’t promote anything without ASIC having an issue with it. Perhaps they should require submission for pre-approval of marketing materials and work WITH the industry instead of waiting to pounce at every opportunity they can find…or create. The fact they went in guns blazing without a care in the world for the consumers they’re supposed to be protecting, but instead just wanted to claim a few more scalps and raise some revenue (thereby putting at jeopardy even MORE the chances of investors receiving anything back) they should have looked to administer or consult and help fix issues they weren’t happy with.
It’s the exact same issue with Advisers and ASIC though – there’s never any consultation or working with industry. Instead it’s refusal to give an opinion on anything you submit to them and then they come back to tear you a new one when you apparently get it wrong. It’s an entire department of poisonous little weasels with short-man and Karen syndromes.
I so agree with James Mawhinney’s statement issued April 8th. In this instance it seems that Asic steamrolled Mayfair with total disregard to the livelihoods & financial well-being of nearly 600 existing investors. Asic could had handled it differently. Investors didn’t deserve this.
They are the losers .