A 20-year ban restraining Mayfair 101 director James Mawhinney from advertising investments and raising funds from the public through financial products has been overturned, but interim injunctions in place before the ban have been reinstated.
The Australian Securities and Investments Commission (ASIC) announced the full Federal Court allowed an appeal by Mawhinney to overturn the ban, handed down in April 2021 by the Federal Court after it found he had engaged in “serious, incompetent and reckless” conduct.
The full court allowed his appeal against the ban on the grounds he was denied procedural fairness because ASIC had not sought certain findings of contraventions, but the primary judge made and relied on those findings in making the restraining order.
The court also ordered that an application from the corporate watchdog for an injunction against Mawhinney be referred to the Federal Court for another hearing, noting the case “involves issues concerning the need for protection of the public from potentially serious harm”.
Pending the outcome of this matter, the full court reinstated interim injunctions made in August 2020 restraining Mawhinney and any company of which he is an officer or shareholder from carrying out a number of actions.
These include receiving or soliciting funds in connection with any financial product, advertising or promoting any financial product, and removing from Australia any assets acquired with funds received in connection with any financial product.
ASIC deputy chair Sarah Court said the regulator took legal action to protect the public from the risk of financial harm due to misconduct, adding Mayfair marketed high-risk products as low risk and 500 investors were still owed $211 million.
The regulator cancelled the Australia financial services licence of the former licensee of Mayfair 101’s debenture products, Quattro Capital Group, in May 2022.
An appeal by four companies in the Mayfair 101 Group against findings they engaged in misleading advertising and the imposition of penalties totalling $30 million is still before the court.
