ASIC files contempt application against Mayfair 101 founder James Mawhinney

Court documents allege the Mayfair 101 founder has failed to comply with a 20-year ban on raising funds.

ASIC is seeking civil penalties against James Mawhinney. Picture: Ally Lombardo.

The corporate regulator on Tuesday filed a contempt application in the Federal Court against Mayfair 101 group founder and director James Mawhinney.

ASIC alleges Mr Mawhinney failed to comply with the Federal Court’s April 19 orders to stop raising funds through financial products for 20 years and is now seeking an order punishing Mr Mawhinney for contempt.

Mr Mawhinney has appealed the 20-year ban.

ASIC also issued separate Federal Court proceedings against Mr Mawhinney, Australian-based company Eleuthera Group and UK-based Eleuthera Group (together, the Eleuthera Entities), alleging they made false or misleading representations and engaged in misleading or deceptive conduct, or conduct likely to mislead and deceive consumers, by sending emails directly to consumers regarding investment options, terms and rates of return.

The Eleuthera Group carried on a financial services business in Australia without holding a local financial services licence when it was required to do so, ASIC also alleges.

ASIC is seeking civil penalties, injunctions preventing Mr Mawhinney and the Eleuthera Entities from promoting or soliciting funds from consumers for purported credit opportunities or similar products, and orders preventing Eleuthera Group from carrying on a financial services business in Australia.

Mr Mawhinney’s Mayfair 101 first made headlines after snapping up the cyclone-ravaged Dunk Island resort on the back of $200m raised through the Mayfair Platinum and IPO Wealth brands run by Mr Mawhinney.

ASIC has submitted the Mayfair 101 scheme, built around investments in the Far North Queensland town of Mission Beach and Dunk Island, was “a Ponzi-like scheme” that relied on new investors to pay out old.

“I deny ASIC’s allegations and intend on vigorously defending these proceedings so our noteholders can be made whole,” Mr Mawhinney said in a statement on Tuesday.

He said the Mayfair Group still controlled assets worth around $100 million and that subject to defending its various proceedings, the group is on track to resume distributions and redemption payments to its noteholders in 2022.