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Tuesday 16 November 2021

21-302MR ASIC files contempt application against James Mawhinney

ASIC has today filed a contempt application in the Federal Court against James Mawhinney, the director of companies in the Mayfair 101 group. 

On 19 April 2021 Mr Mawhinney was ordered by the Federal Court to stop raising funds through financial products for 20 years (21-076MR).  ASIC alleges Mr Mawhinney failed to comply with these orders.

ASIC is seeking an order punishing Mr Mawhinney for contempt.

ASIC also issued separate Federal Court proceedings against Mr Mawhinney, Australian-based company Eleuthera Group Pty Ltd and UK-based Eleuthera Group Ltd (together, the Eleuthera Entities). 

These proceedings allege Mr 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 Mr 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.

Previous Mayfair Court action

On 29 January 2021, the Federal Court wound up M101 Nominees Pty Ltd, a company of which Mr Mawhinney was the director, on just and equitable grounds and appointed Said Jahani and Philip Campbell-Wilson as liquidators (21-012MR).

On 23 March 2021, the Federal Court found companies in the Mayfair 101 Group, of which Mr Mawhinney was also the director, made statements that were false, misleading or deceptive in advertisements for its debenture products (21-055MR).

Background

ASIC has a dedicated webpage for Mayfair 101 Group investors.

ASIC’s Moneysmart website has information on investing in a variety of financial products, including debentures, secured notes and unsecured notes.

Editor's note:

The first return date for both the contempt application and the Eleuthera proceedings has been set for 18 February 2022.

Editor's note 2:

A case management hearing has been listed for both the contempt application and the Eleuthera Proceedings on 4 February 2022.

The contempt application and the Eleuthera Proceedings listed for hearing of the interlocutory applications remains on 18 February 2022.

Editor's note 3:

The hearing of the interlocutory applications on the contempt application and the Eleuthera Proceedings listed for 18 February 2022 have been adjourned to 17 March 2022.

Editor's note 4:

The hearing of the interlocutory applications occurred on 17 March 2022 before O’Callaghan J. His Honour reserved his decision on the applications.

Editor's note 5:

On 4 May 2022, judgment was delivered following the interlocutory hearing on 17 March 2022. O’Callaghan J made orders staying the contempt application and the Eleuthera Proceedings pending the determination of the appeal of:  

  1. The 19 April 2021 orders restraining Mawhinney from fundraising (21-076MR); and
  2. The misleading and deceptive findings made against the Mayfair 101 Group and the penalty orders to pay a combined penalty of $30 million (21-364MR).

His Honour also declined to make the interim injunction orders sought by ASIC. Costs have been reserved.

Last updated: 06/05/2022 10:17