Search

Mayfair 101 Group to pay $30 million penalty for misleading advertising


The Federal Court has ordered four companies in the Mayfair 101 Group to pay a combined penalty of $30 million for misleading advertising. Mayfair 101 Group products were advertised in newspapers, on websites and via Google search advertising, when potential investors searched for terms such as ‘bank term deposits’ and ‘best term deposit’. ASIC Deputy Chair Sarah Court said ‘This penalty makes clear that firms must do the right thing by their investors, irrespective of whether they are wholesale or retail investors. Failing to accurately advertise financial products can result in significant penalties for firms.’ The Court found that the Mayfair companies represented that… · the Notes were comparable to, and of similar risk profile to, bank term deposits, when they were of significantly higher risk, · the Notes carried no risk of default, when in fact there was a risk that investors could lose some, or all, of their principal investment, · the principal investment would be repaid in full on maturity, when this might not occur because Mayfair could extend the time for repayment for an indefinite period, and/or · the M Core Notes were fully secured products when they were not. The Court imposed the following penalties…


· Mayfair Wealth Partners: $10 million · M101 Holdings: $8 million · M101 Nominees (in liquidation): $8 million · Online Investments: $4 million


James Mawhinney a director of each of the Mayfair companies was restrained by the Federal Court in April 2021 from advertising and raising funds through financial products for 20 years. ASIC’s investigation into Mr Mawhinney’s conduct is continuing.

In handing down the decision, Justice Anderson found that, ‘the Defendants deliberately mislead investors into investing in the Mayfair Products under the belief that they would be of low risk when in fact the Mayfair Products were highly speculative and carried very substantial risk.’

His Honour also found that Mr Mawhinney had shown no remorse ‘for the loss and harm caused to investors in the Mayfair Products.’

The Court also permanently restrained the companies from using certain words and phrases (such as ‘term deposit’ and ‘certainty’) in any future advertising.

0 views0 comments