The Federal Court has overturned the 20-year ban of controversial Mayfair 101 director James Mawhinney from advertising or raising funds for investments.
The ban was handed down in April 2021 after ASIC commenced proceedings against Mayfair in April 2020 for deceptive advertising.
The court allowed the appeal on the ground Mawhinney was denied “procedural fairness”.
ASIC’s application for injunctions against Mawhinney will be remitted for another hearing, and the court called the case “very exceptional” and acknowledged it “involves issues concerning the need for protection of the public from potentially serious harm”.
In the meantime, interim injunctions made in August 2020 have been reinstated which continue to prevent Mawhinney from advertising or soliciting funds for any financial product.
ASIC deputy chair Sarah Court said the regulator elected to commence this case because of what they believed is serious misconduct and will continue to pursue action for that reason.
“Mayfair, under Mr Mawhinney’s direction, marketed high-risk products as low risk. Almost 500 people invested in the Mayfair 101 group and they are still owed a total of approximately $211 million.”
In a media statement on the decision, Mawhinney said he is “grateful” the court upheld his appeal.
“However, we are concerned that the matter has been remitted, giving ASIC a second chance to run a new case which it should have got right first time. We have begun preparing an application for special leave to the High Court.”
No slam dunk
On 3 April 2020, ASIC commenced proceedings against Mayfair 101 alleging that its advertisements online and on its own websites were misleading or deceptive.
The regulator alleged Mayfair deceptively advertised debenture products as being lower risk than they are.
In May 2022, ASIC cancelled the Australian financial services licence of Quattro Capital Group, the former licensee of Mayfair 101’s debenture products.
Despite that initial action from the regulator in April 2020, Mayfair advertised the launch of its Australian Property Bond which offered fixed rates of return for security over Mission Beach and Dunk Island properties in Queensland, which it planned to turn into a “tourism mecca”.
Mayfair acquired the island in 2019 which remained underdeveloped after it was ravaged by a tropical cyclone in 2011.
