Investigation results in a 20-year ban for Mayfair 101 Group director
The director of Mayfair 101 Group, James Mawhinney, has been banned for 20 years following a federal court ruling. ASIC’s investigation revealed misleading statements made by the group in advertising their products, leaving approximately $211 million owed to investors. The court case exposed questionable investments and financial practices, causing concern for affected investors.
Mayfair 101, director James Mawhinney has been banned from raising funds, marketing and promoting financial products for 20 years following a federal court ruling on 21 April 2021. This comes after an investigation performed by ASIC found that the Mayfair 101 group made misleading, false and deceptive statements when advertising their products. As a result, approximately $211 million is alleged to be owed to Mayfair 101 Group investors.
Mayfair 101 primarily promoted two products, M+ Fixed Income Notes and M Core Fixed Income Notes, unsecured and secured promissory notes. These products were advertised as comparable to bank deposits in terms of risk and return when these investments possess significant risk profiles. In addition, Mayfair promoted their products to investors seeking “certainty and confidence in their investments” when investors could lose some or all of their investment as well as not receive any interest or capital repayments.
In the court case, Justice Anderson reprimanded James Mawhinney as half a million dollars was found to have been invested into a trust fund from which money was rediverted to a trust fund established under James Mawhinney’s partner or sister’s name. Furthermore, the investigation found that Mr Mawhinney took $100,000 from an investor without issuing a product in return or contacting the investor through a subsidiary called Mayfair Wealth Partners.
These findings have been examined in court following multiple questionable investments highlighted by the Australian Financial Review (AFR). It was alleged that Mr Mawhinney previously invested money into Accloud, an Indian-based accounting software company that recorded zero revenue in 2018 and a net loss of $26 million. The AFR also alleged that other investments made by Mayfair 101 include the failed transformation of Dunk Island, an island off the coast of Mission Beach which was slated to be the next big tourist destination.
The AFR has previously investigated Mayfair 101 and uncovered questionable expenses linked to the investment group. For example, the AFR alleged that roughly $6 million was spent on marketing and advertising, targeting new investors and promoting investments in seminars.
The court case results were bittersweet for several investors who were present in court, complaining that they had been deceived by Mr Mawhinney, ranging from a 29-year-old investor to an 84-year-old retiree. Whilst the company is undergoing liquidation, the redemption of the remaining products has been on hold since March 2020. Justice Anderson stated that there was a “substantial likelihood that most, if not all, of those investors, will never be repaid their principal or interest.”
Mr Mawhinney has appealed the 20-year ban while ASIC is continuing its investigation into Mawhinney’s conduct. The Mayfair 101 Group’s website has been changed and now displays a notice stating that Mayfair is not a bank and that the products are not comparable to a bank deposit. The court has placed an order restraining Mr Mawhinney from removing any asset from Australia that was purchased using funds received in connection with any of the financial products from his company and preventing him from leaving the country.
