ASIC investigation into Mayfair 101/Mayfair Platinum

ASIC will update this webpage when important steps take place in relation to this matter. We suggest you visit this page regularly for updates.

Latest news

2 September 2020 - ASIC obtains interim injunctions against James Mawhinney and appointment of provisional liquidators to Mayfair debenture issuer

ASIC has obtained interim orders in the Federal Court of Australia against companies in the Mayfair 101 group and their director, James Peter Mawhinney, including the appointment of provisional liquidators to M101 Nominees Pty Ltd, the issuer of the M Core Fixed Income Notes promoted by Mayfair 101.

On 13 August 2020, the Court appointed Said Jahani and Philip Campbell-Wilson of Grant Thornton as provisional liquidators of M101 Nominees, pending an application by ASIC to wind up M101 Nominees on just and equitable grounds. ASIC alleges that M101 Nominees has been involved in breaches of the corporations legislation, and there is a justifiable lack of confidence in the conduct and management of its affairs that gives rise to a risk to the public that warrants protection.

In particular, ASIC alleges that M101 Nominees raised approximately $67 million from investors through debentures called the M Core Fixed Income Notes, based on representations that there would be security for the full amount invested. ASIC further alleges that those funds were not fully secured, and consequently, M Core Fixed Income Note investors may be unable to recover the full amount of their principal investment.

The provisional liquidators will provide a report to the Court by 24 September 2020 about the provisional liquidation of M101 Nominees, including identifying its assets and their value, and providing an opinion as to solvency and the likely return to creditors if the company is wound up.

On 13 August 2020, the Court made additional interim orders 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.

These orders apply to all products currently offered by Mayfair 101, including the M Core Fixed Income Notes, the M+ Fixed Income Notes and Australian Property Bonds, as well as any other financial product.

The Court also restrained Mr Mawhinney from leaving Australia until further order.

The Court made interim orders restraining Sunseeker Holdings Pty Ltd, of which Mr Mawhinney is a director, from dealing with the units in 14 trusts which hold property at Mission Beach and Dunk Island in Queensland. The units in those trusts are part of the security held on behalf of investors in the M Core Fixed Income Notes.

At a hearing on 2 September 2020, the matter was adjourned for a further case management hearing on a date to be fixed.

ASIC’s investigation is ongoing.

Download

For more information please see ASIC’s media release issued on 2 September 2020 (20-205MR).

17 April 2020 – Federal court restrains Mayfair 101 and Mayfair Platinum from promoting debenture products and using prohibited phrases in advertising

On 16 April 2020, the Federal Court made interim orders restraining Mayfair Wealth Partners Pty Ltd (Mayfair Platinum) and Online Investments Pty Ltd (Mayfair 101) from promoting their debenture products and prohibiting the use of specific words and phrases in their advertising.

Mayfair Platinum and Mayfair 101 promote M+ Fixed Income Notes and M Core Fixed Income Notes, their debenture products available to wholesale investors (Mayfair debenture products). Payment of redemptions of capital to investors in the Mayfair debenture products was suspended on 11 March 2020 due to liquidity issues.

On 16 April 2020, Justice Anderson of the Federal Court restrained Mayfair Platinum and Mayfair 101, until further order, from:

  • All advertising, promotion and marketing of the Mayfair debenture products; and
  • Using the below prohibited phrases in any advertising, promotion or marketing of any products, including on their websites and through sponsored link advertising, including, via Google AdWords and Bing Ads:
    • “term deposit”;
    • “bank deposit”;
    • “capital growth”;
    • “certainty”;
    • “fixed term”; and
    • “term investment”.

The Court also ordered that Mayfair Platinum and Mayfair 101 must post the following notice on their websites, and give a copy of the following notice to each prospective new investor in the Mayfair debenture products:

“The Mayfair 101 Group of companies reminds investors prior to investing in the products offered by the Mayfair 101 Group that:

  1. Mayfair 101 is not a bank, and nor are any of the companies in the Mayfair 101 Group. Therefore, the Mayfair 101 Group is not regulated by the Australian Prudential Regulation Authority (APRA) and investment in its products is not covered by the Australian Government’s Financial Claims Scheme (colloquially known as the ‘Government Bank Guarantee’ which covers deposits up to A$250,000 per depositor, per bank).
  2. As with all investment products, there are risks in investing in the Mayfair 101 Group’s products.
  3. Investing in the products offered by the Mayfair 101 Group is not the same as depositing money in a term deposit offered by a bank. Investing in Mayfair 101 Group products has a higher level of risk compared to investing in a bank term deposit.
  4. In certain circumstances, the Mayfair 101 Group can exercise the right to suspend some or all redemptions at the end of the fixed term. The Mayfair 101 Group exercised this right on 11 March 2020. As such, all redemptions are currently suspended until such time as management agrees to lift the suspension and process redemptions. Your investment in the products offered by the Mayfair 101 Group may also be subject to suspension of some or all redemptions at the end of the fixed term. This is a risk that you should take into account.”

For more information:

6 April 2020 – ASIC commences proceedings against Mayfair 101 and Mayfair Platinum for misleading or deceptive advertising

On 3 April 2020, ASIC commenced proceedings in the Federal Court of Australia against companies in the Mayfair 101 group, alleging that its advertisements, promoted on Mayfair’s websites and in online media, are misleading or deceptive.

Mayfair Wealth Partners Pty Ltd, trading as Mayfair Platinum, and Online Investments Pty Ltd, trading as Mayfair 101, promote two debenture products to wholesale investors (Mayfair debenture products):

  • M+ Fixed Income Notes, which are unsecured promissory notes issued by M101 Holdings Pty Ltd; and
  • M Core Fixed Income Notes, which are secured promissory notes issued by M101 Nominees Pty Ltd.

ASIC alleges that Mayfair Platinum and Mayfair 101 made statements that were false, misleading or deceptive by representing that:

  • Mayfair debenture products are comparable to bank terms deposits, and have a similar risk profile to bank term deposits, when they are debentures with a significantly higher risk profile;
  • the principal investment will be repaid in full on maturity, when investors may not receive capital repayments on maturity or at all, and because Mayfair could elect to extend the time for repayment for an indefinite period;
  • Mayfair debenture products were specifically designed for people seeking “certainty and confidence in their investments”, when investors may not receive interest and/or capital repayments, and could lose some, or all, of their investment; and
  • Mayfair debenture products provide capital growth opportunities, when they do not.

ASIC is seeking injunctions to restrain the publication of statements of this kind, and pecuniary penalties in relation to the alleged false or misleading representations.

On 11 March 2020, Mayfair Platinum suspended payment of capital redemptions to investors in the Mayfair debenture products due to liquidity issues. In light of this, ASIC is also seeking an interim injunction to restrain the defendants from promoting and issuing the Mayfair products while redemptions to existing investors remain suspended. ASIC’s application for an injunction will be heard by the Federal Court on 14 April 2020 at 9.30am.

For more information please see ASIC’s media release issued on 6 April 2020 (20-080MR).

Download ASIC’s Amended Concise Statement and Amended Originating Process filed with the Court. ASIC does not press the claim against the defendants in relation to the Capital Growth Representations, as referred to in paragraphs 4 and 7(d) of the Amended Originating Process.

Information for Mayfair 101 Group investors

1. What should I do if I have invested in the M Core Fixed Income Notes?

  • On 13 August 2020, the Federal Court of Australia appointed Said Jahani and Philip Campbell-Wilson of Grant Thornton as provisional liquidators of M101 Nominees Pty Ltd, which issues the M Core Fixed Income Notes.
  • A provisional liquidator is appointed by the Court to preserve a company’s assets until a winding up application is determined.
  • On 24 September 2020, the provisional liquidators provided their report to the Court about the provisional liquidation of M101 Nominees. A copy of the report can be downloaded from the Grant Thornton’s website.
  • The provisional liquidators will provide a further update to investors in due course.
  • Interest payments will remain suspended during the provisional liquidation.
  • M Core Fixed Income Note investors can direct any queries to the provisional liquidators by email to M101@au.gt.com  
  • ASIC currently has an application to wind up M101 Nominees before the Federal Court, which is listed for hearing on 1–2 February 2021.

2. What should I do if I have invested in the M+ Fixed Income Notes?

  • You should consider whether the investment continues to be suitable for your circumstances. You may wish to seek independent financial advice.
  • Investors are advised to be wary of investments that claim they are an alternative to a bank ‘term deposit’. If an investment provides higher returns than a term deposit, it is likely to be higher risk.
  • If you wish to redeem your investment:
    • Contact the product issuer, Mayfair 101.
    • You should ensure you fully understand how to end the investment and the deadline for giving any notice to do so.
    • From March 2020, Mayfair 101 has suspended redemptions of the M+ Fixed Income Notes for investors whose investments have matured. It is up to Mayfair 101 to decide when it will resume paying redemptions.
    • Investors can still make a request to Mayfair 101 to exit their investment despite redemptions having been suspended.

3. What should I do if I have invested in the IPO Wealth Fund?

  • The IPO Wealth Fund was an unregistered managed investment scheme promoted by Mayfair 101.
  • Money invested into the IPO Wealth Fund was loaned to IPO Wealth Holdings Pty Ltd, then on-loaned to various special purpose vehicles (SPVs) which invested in different products and entities.
  • On 22 May 2020, Hamish MacKinnon and Nicholas Giasoumi of Dye & Co were appointed as receivers and managers of the business and assets of IPO Wealth Holdings Pty Ltd and the SPVs on the application of Vasco Trustees Ltd, the trustee of the IPO Wealth Fund.
  • On 29 May 2020, Vasco and the receivers applied to wind up IPO Wealth Holdings Pty Ltd and the SPVs, and to appoint the receivers as provisional liquidators.
  • On 2 July 2020, the Supreme Court of Victoria appointed Hamish MacKinnon and Nicholas Giasoumi of Dye & Co as provisional liquidators of IPO Wealth Holdings Pty Ltd and the SPVs.
  • On 27 August 2020, the provisional liquidators provided a report to the Court about the provisional liquidation of the companies, including identifying the assets and liabilities of the companies, and providing an opinion as to solvency and the likely return to creditors if the companies are wound up.
  • On 17 September 2020, the Supreme Court of Victoria ordered that IPO Wealth Holdings Pty Ltd and the SPVs be wound up in insolvency and on just and equitable grounds, and appointed Hamish MacKinnon
    and Nicholas Giasoumi of Dye & Co as liquidators.

4. What should I do if I have invested in Australian Property Bonds?

  • You should consider whether the investment continues to be suitable for your circumstances. You may wish to seek independent financial advice.
  • If you wish to redeem your investment:
    • Contact the product issuer, Australian Income Solutions Pty Ltd trading as Australian Property Bonds.
    • You should ensure you fully understand how to end the investment and the deadline for giving any notice to do so.

5. Can I complain to the Australian Financial Complaints Authority (AFCA)?

  • Yes. The licensees of:
    • the M+ Fixed Income Notes, M Core Fixed Income Notes and Australian Property Bonds – Quattro Capital Group Pty Ltd; and
    • the IPO Wealth Fund – DH Flinders Pty Ltd,

are members of AFCA, therefore AFCA has the power to hear complaints about those products.

  • Investors in Mayfair products who have suffered financial loss or who have other concerns may choose to make a complaint to AFCA.
  • Before contacting AFCA, investors should first raise their concerns directly with Mayfair 101.
  • For more information, please refer to ASIC Information Sheet 174 Disputes with Financial Firms
  • AFCA can be contacted on 1800 931 678. The service is free to access.

Reporting information to ASIC

Consumers that have concerns about their dealings with the Mayfair 101 group can lodge a report of misconduct with ASIC.

Last updated: 12/11/2020 01:24