James Mawhinney

The Federal Court dismissed Mayfair 101’s appeal which would overturn the findings of misleading or deceptive advertising that resulted in a $30 million penalty.

The decision is a win for ASIC after Mayfair 101 Director James Mawhinney had his 20-year ban overturned some four weeks ago.

ASIC commenced action against the company in April 2020, which culminated in the penalty beinghanded down at the end of 2021.

However, orders that restrained the Mayfair companies from using specific phrases such as ‘bank deposit’ and ‘term deposit’ on any advertisements was cancelled as the court deemed it to be “too broad and unworkable”.

ASIC deputy chair Sarah Court said ASIC pursued the case because of the importance of accurate advertising of financial products.

“We were concerned that the advertising by the Mayfair 101 Group represented that their products were of a similar risk profile to bank term deposits, when that was not the case,” she said in a media release on Monday afternoon.

“The decision to uphold the original findings of the Federal Court, and ASIC’s case that the Mayfair 101 Group’s advertising was misleading or deceptive, is a message to industry that financial products need to be accurately advertised or companies may risk substantial penalties.”

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.