ASIC has taken the action against Mayfair 101 companies Mayfair Wealth Partners, trading as Mayfair Platinum, and Online Investments, trading as Mayfair 101, over the promotion of two debenture products to wholesale investors.
The products were M+ Fixed Income Notes, which are unsecured promissory notes issued by M101 Holdings, and M Core Fixed Income Notes, which are secured promissory notes issued by M101 Nominees.
Mayfair Platinum and Mayfair 101 were reported to use sponsored link internet advertising, through Google AdWords and Bing Ads, so the websites for the Mayfair debenture products appear as sponsored links when consumers search for “bank term deposit” or “term deposit” online.
The regulator commented that Mayfair’s promotional material had also used words such as “term deposit alternative”, “term investment” and “fixed term”; “certainty” and confidence” and “capital growth”.
ASIC has claimed Mayfair Platinum and Mayfair 101 have made false, misleading or deceptive statements by representing that:
- Mayfair debenture products are comparable to bank terms deposits, and have a similar risk profile to bank term deposits, when they are debentures with a significantly higher risk profile;
- the principal investment will be repaid in full on maturity, when investors may not receive capital repayments on maturity or at all, and because Mayfair could elect to extend the time for repayment for an indefinite period;
- Mayfair debenture products were specifically designed for people seeking “certainty and confidence in their investments”, when investors may not receive interest and/or capital repayments, and could lose some, or all, of their investment; and
- Mayfair debenture products provide capital growth opportunities, when they do not.
The regulator has sought injunctions to restrain such statements from being published and penalties in relation to the alleged false or misleading representations.
The proceedings have come after Mayfair Platinum suspended payment of capital redemptions to investors in the debenture products due to liquidity issues on 11 March.
In light of this, ASIC is seeking an interim injunction to restrain the defendants from promoting and issuing the products while redemptions to existing investors remain suspended.
ASIC’s application for an injunction will be heard by the Federal Court on 14 April.
The regulator has called for consumers with concerns about their dealings with the group to lodge a report of misconduct.
Is IFA going to write any articles on Industry Fund illiquidity issues? HostPlus changing their PDS to stop their members moving to cash? The silence is deafening…
ASIC will gladly jump on an Adviser if an FDS or Opt-In is a few days late, or there’s an error with punctuation in a SoA (an SoA that a client doesn’t want anyway) and hand out EUs or Banning Orders, though they take how long to do something about the likes of Mayfair and similar promoters?
‘suspension of capital payments due to liquidity issues ‘ This is a red flag for ASIC to get off their backside and review the industry fund illiquidity issues and their marketing of returns against more liquid and diversified benchmarks.
John Edwards you are literally parroting the words of Tim Wilson MP (Born to rule).
Mayfair Platinum was a ponzi scheme. Read their FSG. Read their product. They offered a paltry return for high risk.
Tell me what are industry funds going to buy if they can only buy listed securities? Are they just going to buy Vanguard and State Street ETF’s and put a wrapper on it. They are managed investment schemes and they knew how much people needed to redeem, how much people required in pension payments, etc.
If you force them to only deal in the universe of listed secondary market securities, then they can only buy what is on the markets. This means no toll roads, cant build hospitals, cant build office blocks, etc, can’t build infrastructure, can’t build housing.
They invest for 10-20-30 years and build a model that has this long term capital investment, they price it using independent valuations, and then govt comes along and says everyone can take 20k from their funds.
It’s like kicking someone in the shins and then saying, why aren’t you wearing shinpads.
Mayfair Platinum on the other hand offered this as an investment with a fixed term that at the end of the fixed term, cannot redeem because no one wants to buy their stuff. it was “term deposit” like only because they said that you may get a fixed return.
Yet still no action by ASIC on the union funds widely advertising the their “balanced” portfolios which are incorrect titled considering their over 90% allocation to growth assets, clearly misleading investors?