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Friday 17 April 2020

20-092MR Federal Court restrains Mayfair Platinum and Mayfair 101 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. This follows an application made by ASIC for an interim injunction on 3 April 2020.

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.”

The Court declined to restrain the defendants from issuing and accepting new investments in the Mayfair debenture products.

Background

On 3 April 2020, ASIC commenced proceedings against companies in the Mayfair 101 group, alleging that they engaged in false, misleading or deceptive conduct (20-080MR).

The Court will list the matter for hearing to determine ASIC’s allegations in due course.

ASIC has a dedicated webpage for Mayfair 101/Mayfair Platinum debenture product investors.

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

Editor's note:

The matter has been set down for a hearing commencing on 28 September 2020.

Editor's note 2:

On 9 September 2020, the Court ordered that the hearing listed to commence on 28 September 2020 be vacated. The matter has been listed for a further case management hearing on 22 October 2020.

Editor's note 3:

On 22 October 2020, the matter was listed for a further case management hearing on 3 December 2020.

Editor's note 4:

On 13 August 2020, ASIC filed an Amended Originating Process and Amended Concise Statement. 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.

Editor's note 5:

On 30 November 2020, the matter was listed for a case management hearing on 10 December 2020. The case management hearing listed for 3 December 2020 was vacated.

Editor's note 6:

On 10 December 2020, the matter was listed for trial commencing on 15 February 2021 for 2-3 days. The Court also ordered the parties to attend a mediation before a Registrar of the Court in January 2021.

Editor's note 7:

On 23 December 2020, the Court vacated the order made on 10 December 2020 requiring the parties to attend a mediation. The matter remains listed for trial, commencing on 15 February 2021.

Editor's note 8:

On 15 February 2021, ASIC filed a Further Amended Originating Process. The trial was heard by Justice Anderson on 15 February 2021. Judgment has been reserved.

Editor's note 9:

Judgment was delivered by the Court on 23 March 2021 (refer: 21-055MR). A penalty hearing will be listed on a date to be confirmed by the Court.

Editor's note 10:

On 26 March 2021, the matter was listed for a case management hearing on 6 April 2021.

Editor's note 11:

On 1 April 2021, the case management hearing listed for 6 April 2021 was vacated, and the Court instead made timetabling orders on the papers. The matter has been listed for a penalty hearing on 20 July 2021.

Last updated: 21/04/2021 01:37