Full Federal Court judgement causes ASIC rethink on Mayfair 101’s Mawhinney

Mike Taylor

Managing Editor/Publisher, Financial Newswire

15 September 2022

The Australian Securities and Investments Commission (ASIC) has found itself retracing some of its steps in its prosecution of Mayfair 101 Group Director, James Mawhinney.

The regulator announced that the Full Federal Court had allowed an appeal by Mawhinney to overturn a 20-year ban restraining him from advertising investments and raising funds from the public through financial products.

The appeal followed the Federal Court in 2021 granting a restraining order against Mawhinney after finding he engaged in “serious, incompetent and reckless conduct”.

ASIC said the Full Court allowed the appeal on the ground that Mawhinney 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 Full Court also ordered that ASIC’s application for injunctions against Mawhinney be remitted to the Federal Court for another hearing, calling the case “very exceptional” and acknowledging that it “involves issues concerning the need for protection of the public from potentially serious harm”.

Pending the final determination of the matter, the Full Court reinstated the interim injunctions made in August 2020 restraining Mr Mawhinney, and any company of which he is an officer or shareholder, from:

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.

Commenting on the Court’s findings, ASIC Deputy Chair Sarah Court said, “ASIC took this case to protect the public from the risk of significant financial harm arising from what we believed to be serious misconduct. Mayfair, under Mr Mawhinney’s direction, marketed high-risk products as low risk. Almost 500 people invested in the Mayfair 101 group and they are still owed a total of approximately $211 million.

“ASIC will carefully consider today’s judgment and evaluate our next steps. Meanwhile, as part of today’s decision, the Court has reinstated injunctions we had previously obtained against Mr Mawhinney. These measures will prevent further investor harm while proceedings are ongoing.”