VID228/2020 - ASIC v Mayfair Wealth Partners Pty Ltd & Ors

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Commenced

6 April 2020, Federal Court of Australia

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Judge

The Honourable Justice Stewart Anderson

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Relief sought

Declarations of misleading or deceptive advertising relating to M+ Fixed Income and M Core Fixed Income notes containing:

• bank term deposit representations

• repayment representations

• no risk of default representations

• capital growth representations (withdrawn by ASIC)

• security representations

Penalties of $12 million.

Corrective advertising including newspapers, emails and website.

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Timeline

• 11 March 2020 - Mayfair 101 temporarily suspends redemptions to manage onset of COVID-19.

• 13 March 2020 - ASIC sends Mayfair 101 a Public Warning Notice it proposes to publish on ASIC's website to warn investors of Mayfair 101 and Mr Mawhinney.

• 26 March 2020 - Mayfair 101 applies to court and obtains injunction against ASIC publishing Public Warning Notice.

• 6 April 2020 - ASIC commences proceedings in Federal Court for misleading or deceptive conduct.

• 16 April 2020 - ASIC granted interim injunctions ceasing marketing & promotion of the M+ and M Core note products and use of certain phrases.

• Late April 2020 - ASIC representatives begin contacting Mayfair 101 investors to collect evidence.

• 27 October 2020 - ASIC advises it no longer presses the "capital growth representations" of the notes.

• 23 March 2021 - Case decided in ASIC's favour.

• 25 May 2021 - ASIC advises it is seeking penalties of $6 million against the 4 defendants.

• 18 June 2021 - ASIC doubles the proposed penalties to $12 million. 

• 29 September - 5 October 2021 - penalty hearing. Mayfair 101 defends the case, seeking nil penalties.

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Justice Anderson has reserved his decision.

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Note: This proceeding was undefended from 9 September 2020 onward. ASIC obtained injunctions in this proceeding and in VID524/2020 which meant the group was unable to access resources to defend the proceeding.  Legal representation was appointed in June 2021 to defend the proposed penalties. 

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Court Documents

• Amended Originating Process

• Final judgement​

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3rd Party Documents

• ASIC's brief to Jason Tracy (Expert Witness, Deloitte) - Page 4 - missing comma

• Expert Opinion of Jason Tracy 12 June 2020

• Expert Opinion of Jason Tracy - First Supplementary Report 12 August 2020

• Expert Opinion of Jason Tracy - Second Supplementary Report 14 September 2020

• Expert Opinion of Jason Tracy - Third Supplementary Report 10 December 2020

• Provisional liquidator's report - M101 Nominees Pty Ltd

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Mayfair 101 Documents

• Formal advice obtained from KHQ Lawyers - Setup of note products

• Formal advice obtained from J Ribbands (barrister) - Setup of note products

• Offer Document - M+ Fixed Income

• Deed Poll - M+ Fixed Income

• Offer Document - M Core Fixed Income

• Deed Poll - M Core Fixed Income

• Security Trust Deed (M Core notes) - Schedule1 c7.3 confirms compliant security types (cash, real estate, other assets)

• Mayfair 101's Formal Response - Provisional Liquidator's Report of Said Jahani and Philip Campbell-Wilson (Grant Thornton)

• Financial Statements & Explanatory Notes - M101 Nominees Pty Ltd, 13 August 2020.

• Eleuthera Facility Agreement - c2.3(a)(i) specifies each drawdown term is 12 months.

• Drawdown Notices - 229 individual drawdown notices pursuant to the Eleuthera Facility Agreement.​

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ASIC's Press Releases

• ASIC commences proceedings against Mayfair 101 and Mayfair Platinum for misleading or deceptive advertising

• Federal Court restrains Mayfair Platinum and Mayfair 101 from promoting debenture products and using prohibited phrases in advertising

• ASIC succeeds in Court action against Mayfair 101 for misleading and deceptive advertising

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Mayfair 101 Press Releases

• Mayfair 101 defends compliance of its financial products

• ASIC Relies on Error-Riddled Reports to Crucify Mayfair 101 Investors

• Response to Federal Court Judgement Decision in ASIC v Mayfair Wealth Partners Pty Ltd

• Penalty Hearing Gives Mayfair 101 an Opportunity to Respond

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Redemptions

On 11 March 2020 Mayfair 101 temporarily suspended redemptions to manage the impact of COVID-19 in accordance with the M+ and M Core note Deed Polls.

• 20 March 2020 - Letter from ASIC to responsible entities recommending the suspension of redemptions to manage liquidity due to COVID-19.

• 26 August 2020 - Media statement from Karen Chester (ASIC's Deputy Chairperson) advocating for the suspension of redemptions to manage liquidity due to COVID-19.

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ASIC's True-to-label Campaign

15 June 2020 - ASIC releases a media statement regarding its "True to label" campaign.  ASIC's Deputy Chairperson states "Following our review, we directly raised concerns with seven REs about their advertising and disclosure in relation to 13 investment funds".  ASIC did not raise its concerns about Mayfair 101's advertising and disclosures.  

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Latest updates

Update to Investors

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

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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