Following the Federal Court’s recent decision that companies in the Mayfair 101 Group made statements that were false, misleading, or deceptive in advertisements for its debenture products (see here) the Federal Court in Australian Securities and Investments Commission v M101 Nominees Pty Ltd (No 3) [2021] FCA 354 has restrained Mayfair 101 director James Mawhinney from promoting and raising funds through financial products for 20 years.

Justice Anderson characterised Mr Mawhinney’s conduct as ‘serious, incompetent and reckless and displaying a propensity for conduct in disregard of the requirements of financial services laws.’

He also observed that:

• “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.”
• “Mr Mawhinney engaged in conduct that entailed ‘inherently problematic, risky and fatally flawed’ investment schemes. His Honour also found Mr Mawhinney ‘has expressed no contrition or remorse for the very significant loss of investors’ funds”.
• “there is simply no evidence tendered by Mr Mawhinney that he has reformed or that he does not intend to cease implementing highly problematic investment schemes.”

The Court restrained Mr Mawhinney (himself, or through any company of which he is an officer or shareholder) from advertising investments and seeking or accepting funds from the public in connection with any financial product, for 20 years.

The Court also restrained Mr 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.

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Author: David Jacobson
Principal, Bright Corporate Law
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The information contained in this article is not legal advice. It is not to be relied upon as a full statement of the law. You should seek professional advice for your specific needs and circumstances before acting or relying on any of the content.