The Australian Securities and Investments Commission (ASIC) has filed a contempt application against James Mawhinney, the director of companies in the Mayfair 101 group, alleging he has not complied with court orders to stop raising funds through financial products.
ASIC made the application to the Federal Court after Mawhinney received orders from that court on 19 April 2021 to stop raising funds for 20 years.
The corporate regulator also issued separate proceedings against Mawhinney and the Australian-based Eleuthera Group Pty Ltd and United Kingdom-based Eleuthera Group Ltd.
ASIC alleged Mawhinney and the two Eleuthera entities made false or misleading representations and engaged in misleading or deceptive conduct, or conduct likely to mislead and deceive consumers via emails sent directly to consumers regarding investment options, terms and rates of return.
The corporate watchdog further alleged Eleuthera Group Pty Ltd provided financial services in Australia without a licence as legally required.
ASIC is seeking civil penalties and injunctions to prevent Mawhinney and the Eleuthera entities from promoting or soliciting funds from consumers for supposed credit opportunities and similar products, as well as orders preventing Eleuthera Group from continuing its financial service business in Australia.
In response to ASIC’s application, Mawhinney said via a statement to media: “I deny ASIC’s allegations and intend on vigorously defending these proceedings so our noteholders can be made whole.”
He added the Mayfair Group still controlled assets worth around $100 million, and subject to defending itself in the proceedings, was on track to resume distributions and redemption payments to its noteholders in 2022.
The contempt application by ASIC comes after Mayfair 101 Group was found by the Federal Court in March 2021 to have made false, misleading or deceptive statements in advertisements for its debenture products.
Earlier this year, the Federal Court wound up M101 Nominees, of which Mawhinney was the director, and placed it into liquidation.
