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UPDATE (17 Nov 2021): James Mawhinney has responded to ASIC launching contempt proceedings and has denied the ASIC allegations.
James Mawhinney, director of the Mayfair 101 Group, is back in the sights of the Australian Securities and Investment Commission (ASIC) which is alleging he breached a ban prohibiting him from raising funds.
ASIC is seeking an order punishing Mawhinney for contempt, alleging the businessman failed to comply with orders made by the Federal Court to stop raising funds through financial products for 20 years.
That order was handed down in April this year, with the Federal Court finding there was a high likelihood the director would engage in a similar conduct again if a prohibition order was not made.
At the time, the Federal Court described his conduct as “reprehensible”. With approximately $211 million in investors losses attributed to multiple product failures across the Mayfair 101 Group, ASIC deputy chair Karen Chester celebrated the win on behalf of unsophisticated investors who were "lured" into high risk products via misleading marketing.
Those findings followed another decision from the Federal Court, which found Mayfair 101 misled investors by promoting debenture products online as being term deposits.
ASIC also issued separate Federal Court proceedings today against Mawhinney, Australian-based company Eleuthera Group Pty Ltd and UK-based Eleuthera Group Ltd (together, the Eleuthera Entities).
These proceedings allege Mawhinney and the Eleuthera Entities made false or misleading representations and engaged in misleading or deceptive conduct, or conduct likely to mislead and deceive consumers, by sending emails directly to consumers regarding investment options, terms and rates of return.
ASIC also alleges that Eleuthera Group Pty Ltd carried on a financial services business in Australia without holding an Australian financial services licence when it was required to do so.
ASIC is seeking civil penalties, injunctions preventing Mawhinney and the Eleuthera Entities from promoting or soliciting funds from consumers for purported credit opportunities or similar products, and orders preventing Eleuthera Group Pty Ltd from carrying on a financial services business in Australia.
UPDATE (17 Nov 2021):
Director of Mayfair 101 Group James Mawhinney has denied the allegations made by ASIC, and said he will defend the proceedings.
"I deny ASIC’s allegations and intend on vigorously defending these proceedings so our noteholders can be made whole,” Mawhinney said.
The media release also notes the director and the Mayfair Group still controlled assets worth around $100 million and that subject to defending its various proceedings, the group is on track to resume distributions and redemption payments to its noteholders in 2022.
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