ASIC pushes back on Mayfair 101 claims as James Mawhinney fights 20-year ban, $30m fine

Mayfair managing director James Mawhinney is appealing his ban and $30m of fines in court, arguing ASIC ruined his plans to transform Mission Beach and Dunk Island into a tourism mecca.

Mayfair 101 managing director James Mawhinney outside the Victorian Federal Court. Picture: David Ross

The corporate regulator has pushed back on suggestions it brought about the collapse of Mayfair 101, arguing the company engaged in misleading conduct when it took money from investors despite freezing redemptions.

Mayfair managing director James Mawhinney has taken the Australian Securities & Investments Commission to the Federal Court in a bid to appeal against $30m in fines levied against the company and a 20-year ban on advertising financial services.

Mr Mawhinney claims the regulator brought about the collapse of his plans to transform the Far North Queensland town of Mission Beach and Dunk Island into a tourism mecca.

But ASIC argues Mayfair engaged in deceptive conduct and misled investors from whom it raised $211m, alleging one investor invested despite withdrawals from the investment scheme having been frozen by Mr Mawhinney 11 days earlier.

Mayfair suspended redemptions from the notes sold to investors in March 2020, claiming the Covid-19 pandemic had affected the company.

Mayfair 101 made headlines with the high-profile purchase of hundreds of properties in Mission Beach and Dunk Island, an island previously owned by mining entrepreneur Peter Bond.

Mayfair 101 managing director James Mawhinney at Mission Beach earlier this year. Picture: Peter Carruthers

The regulator pushed back on suggestions from Mr Mawhinney that he had been lulled into giving evidence to ASIC about the ­Mayfair investment scheme.

Mr Mawhinney alleged he was not aware of his right to give privileged responses in an examination, which would prevent them being used against him.

However, ASIC said Mr Mawhinney had clearly been alerted to his right to privilege in earlier hearings.

ASIC launched legal action against four companies in the Mayfair group in April last year, alleging the company had been misleading investors into thinking its investment products were as safe as bank deposits. This culminated in two cases before Federal Court judge Stewart Anderson, who handed out the ban and fines.

Justice Anderson said Mr Mawhinney had a “total disregard for the law” and he had “no confidence” he properly understood financial services laws or would cease his activity if not restrained. Mayfair’s legal team has alleged Justice Anderson overstepped his powers in making the rulings.

ASIC alleges that the Mayfair entities had continued spruiking products to investors despite being repeatedly warned that they lacked an Australian Financial Services Licence.