James Mawhinney said that he “expected” the Federal Court’s ruling and that Mayfair had chosen not to contest the matter, instead focusing its resources on restructuring the group to “minimise any further damage caused by proceedings brought by ASIC”.
“We had a defensible case, however it was not feasible to defend ourselves against an infinitely well-funded government department. All our advertising was signed off by the group’s lawyers and was deemed compliant within the Corporations Act,” Mr Mawhinney said.
“Ms Karen Chester of ASIC only today has been quoted saying ‘that’s a matter for Parliament’ in relation to ASIC’s desire to change wholesale investor rules. I question why Ms Chester did not raise this prior to putting at risk $210 million investors monies, all of which complied with existing wholesale investor laws. Our investors deserve to be outraged by this senseless abuse of power.”
The Federal Court found that Mayfair misled investors by advertising its products as fully secured and comparable in risk to bank term deposits and that it had deliberately targeted individuals looking to invest in term deposits.
“I am satisfied that the Mayfair products have been, in fact, designed by the defendants to produce a result which is uncertain for investors and could not on any reasonable view be described as an investment with no risk of default,” Federal Court Justice Stewart Anderson said in his judgement.
“Mawhinney was the directing mind and will, and the ultimate beneficiary, of each of the defendants.”
The corporate regulator has been in a running battle with Mayfair – which had previously planned to redevelop Dunk Island as a “tourism mecca” – for years, and is pursuing pecuniary penalties against it. Mr Mawhinney has accused the regulator of constructing “fictitious evidence” to advance its claims and defended accusations that Mayfair has misappropriated investor funds.
It shows you just how broken the system is where the wholesale client certificate or the $500k product test becomes a way to obviate all consumer protections. Entire businesses are built on this loophole and it’s time to shut it down.
It is absolutely unconscionable to be “advertising its products as fully secured and comparable in risk to bank term deposits and that it had deliberately targeted individuals looking to invest in term deposits.”
Such conduct needs to be stopped.
But apparently it’s quite OK for some union super funds to advertise themselves as being “Balanced” when they have over 90% growth assets.
Yep even APRAs heat map confirmed Industry Super had 94% Growth assets in their balanced fund.
What does other government body ASIC do about their best buddies outrageous product description lies.
Yep corrupt ASIC do nothing. It’s industry super, They can do whatever they want.