Mayfair 101 founder James Mawhinney has announced he is suing the Australian Securities and Investments Commission (ASIC) for defamation in relation to statements made in a recent press release that alleges his actions caused investors to lose money.
Mawhinney has commenced proceedings in the Western Australian district registry of the Federal Court, alleging ASIC and its deputy chair, Sarah Court, provided quotes and assisted in the preparation of a 15 September ASIC media release that defamed him and led to loss of business.
In a media release, which relates to the full Federal Court overturning a 20-year ban against Mawhinney, ASIC stated it had taken on the Mayfair 101 case to “protect the public from the risk of significant financial harm arising from what we believed to be serious misconduct” and that almost 500 people who invested in the Mayfair 101 Group are still owed a total of about $211 million.
In a statement released by Mawhinney, he claimed the press release conveyed imputations that he “knowingly misled the public by marketing high-risk products as low risk”, leading to the losses stated by ASIC.
He also alleged the press release implied that “by reason of his serious misconduct in advertising investments, receiving or soliciting funds and misleading marketing, [he] caused 500 investors in the Mayfair 101 Group to lose approximately $211 million”.
Additionally, he claimed the press release implied that “by reason of his serious misconduct in advertising investments, receiving or soliciting funds and misleading marketing, [he] caused so much harm to investors in Mayfair 101 that, unless restrained by injunctions of the court while proceedings continue, he will cause further harm to investors”.
He said the statement of claim includes claims for damages and aggravated damages arising from his reputation being “seriously injured”, as well as “distress and embarrassment” due to the press release, and since the matter is now before the court he will not be making any further comment.
The defamation action follows a decision by the full Federal Court to dismiss an appeal by Mayfair 101 against an ASIC finding that it engaged in misleading and deceptive advertising and be required to pay a $30 million penalty in relation to the advertising.