In a statement on Monday, the corporate regulator said the Full Federal Court dismissed the appeal which sought to overturn the findings of misleading or deceptive advertising, and the $30 million penalty, other than in respect of an injunction against the companies restraining them from using certain specified phrases in their advertising, marketing or promotion which the Full Court has set aside.
“ASIC pursued this case through the Federal Court because of the importance of accurate advertising of financial products. We were concerned that the advertising by the Mayfair 101 Group represented that their products were of a similar risk profile to bank term deposits, when that was not the case,” said ASIC deputy chair Sarah Court.
“The decision to uphold the original findings of the Federal Court, and ASIC’s case that the Mayfair 101 Group’s advertising was misleading or deceptive, is a message to industry that financial products need to be accurately advertised or companies may risk substantial penalties,” Ms Court added.
In March 2021, the Federal Court found Australian Income Solutions (previously Mayfair Wealth Partners), M101 Holdings, M101 Nominees and Online Investments (trading as Mayfair 101) engaged in misleading or deceptive conduct and made false or misleading representations when promoting the M+ and M Core Fixed Income Notes. Subsequently, in December 2021, the court awarded penalties totalling $30 million against the Mayfair companies.
The Full Court set aside orders made on 21 January 2022 restraining the Mayfair companies from using certain specified phrases such as ‘bank deposit’ and ‘term deposit’ in their advertising, marketing or promotion on the basis that this injunction was ‘too broad and unworkable’.
The appeal was otherwise dismissed and the Full Court ordered the Mayfair companies to pay ASIC’s costs of the appeal.
Last month, the Full Federal Court overturned a 20-year ban against James Mawhinney, which was initially implemented to restrain him from advertising investments and raising funds from the public through financial products.
Mayfair managing director, Mr Mawhinney, earned the ban last year after the Federal Court found that he showed “no contrition or remorse” for his part in a scheme that allegedly cost its investors hundreds of millions.
Calling the case “very exceptional”, the court ordered that the corporate regulator’s application for injunctions against Mr Mawhinney be remitted to the Federal Court for another hearing.
Pending the final determination, the Full Court has reinstated the interim injunctions made in August 2020, which restrained 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.
