Mawhinney and Mayfair 101 appeal to overturn 20-year ban and $30 million fine

Mawhinney and Mayfair 101 appeal to overturn 20-year ban and $30 million fine

Mayfair 101 managing director James Mawhinney

Four months after being hit with a $30 million fine for misleading advertising of debenture products - more than double that sought by the corporate watchdog - managing director of Mayfair 101 James Mawhinney is looking to have two judgments overturned.

Specifically, Mawhinney is hoping to overturn his 20-year ban on dealing in financial products, in addition to getting the $30 million fine ordered against the investment company thrown out.

In a press release, Mawhinney claims the legal action brought against his company by the Australian Securities and Investment Commission (ASIC) threw a spanner in the works for the company’s redevelopment of Dunk Island.

“The events of the past two years have been a shocking experience, it is almost surreal what has occurred,” Mawhinney said.

“Nearly 600 Australians who entrusted Mayfair 101 with their funds have had their lives and wellbeing put on hold while we respond to the allegations against us with one hand tied behind our back.

“It is a terrible situation that might well have been avoided if a more conciliatory and careful approach had been taken by ASIC.”

In the judgment being appealed by Mayfair 101, handed down by Justice Anderson last December, the Court found the increased penalty of $30 million was appropriate.

“The Defendants deliberately mislead investors into investing in the Mayfair Products under the belief that they would be of low risk when in fact the Mayfair Products were highly speculative and carried very substantial risk,” Justice Anderson said.

His Honour also found that Mr Mawhinney had shown no remorse “for the loss and harm caused to investors in the Mayfair Products”.

The Court permanently restrained the companies from using certain words and phrases (such as ‘term deposit’ and ‘certainty’) in any future advertising.

ASIC also had a win against Mawhinney in April 2021, restraining him from advertising and raising funds through financial products for 20 years - another judgement that the managing director is seeking to have overturned.

“This penalty makes clear that firms must do the right thing by their investors, irrespective of whether they are wholesale or retail investors,” ASIC deputy chair Sarah Court said at the time.

“Failing to accurately advertise financial products can result in significant penalties for firms.”

Both appeals are scheduled to be heard over five days commencing Monday 22 August 2022.

“A favourable outcome in these appeal cases will allow us to rebuild and set a course for our investors to be made whole,” Mawhinney said.

“Our investors have always been our top priority and today’s steps are an important milestone toward protecting their interests. We won’t rest until this is made right.”

ASIC was approached for comment but declined.

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