Australian Securities and Investments Commission v M101 Nominees Pty Ltd (No 3) [2021] FCA 354

Australian Securities and Investments Commission v M101 Nominees Pty Ltd (No 3) [2021] FCA 354

The applicant (ASIC) established that the defendants, particularly Mr Mawhinney as controlling mind and will, by themselves and through controlled entities, engaged in repeated, significant contraventions of the Corporations Act 2001 (Cth) and the ASIC Act 2001 (Cth) by issuing and marketing financial products (including the Core Notes, M+ Notes, IPO Capital, IPO Wealth Fund, and Australian Property Bonds) to investors without proper licensing, making misleading or deceptive representations about those products (notably as to security, risk, and liquidity), using new investor funds to pay old investors without adequate disclosure, and failing to manage investor funds with appropriate...

Jurisdiction
Australia
Judgment Date
19 April 2021
Procedural Posture
Civil / Final Judgment and Orders on Application for Permanent Injunctions
Outcome
Orders made granting injunctions restraining Mr Mawhinney and related parties from engaging in certain financial product activities for a period of 20 years; other relief, including costs, as set out in the formal orders.
Legal Topics
['financial Products' 'financial Services Without Licence' 'misleading or Deceptive Conduct' 'injunctions in Financial Regulation' "directors' Duties" 'retail and Wholesale Investors']
['corporations Law' 'financial Services Law'] ['financial Products' 'financial Services Without Licence' 'misleading or Deceptive Conduct' 'injunctions in Financial Regulation' "directors' Duties" 'retail and Wholesale Investors']

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Procedural Posture

Civil / Final Judgment and Orders on Application for Permanent Injunctions

Legal Issues

  1. 1 ['Whether certain entities provided financial services or financial products without a financial services licence in contravention of s 911A(1) of the Corporations Act 2001 (Cth)' 'Whether the financial products offered were misleading or deceptive or involved misleading representations in breach of s 1041H of the Corporations Act 2001 (Cth) and ss 12DA(1), 12DB(1)(a), 12DB(1)(e) of the Australian Securities and Investments Commission Act 2001 (Cth)' 'Whether funds raised from new investors were used to meet redemptions or interest for old investors and whether this was adequately disclosed' "Whether Mr Mawhinney was the 'directing mind and will' or otherwise involved in contraventions under s 79 of the Corporations Act and s 12GBCL of the ASIC Act" 'Whether jurisdiction is enlivened to grant permanent injunctions and other relief under ss 1101B and 1324 of the Corporations Act 2001 (Cth)']

Ratio Decidendi

The applicant (ASIC) established that the defendants, particularly Mr Mawhinney as controlling mind and will, by themselves and through controlled entities, engaged in repeated, significant contraventions of the Corporations Act 2001 (Cth) and the ASIC Act 2001 (Cth) by issuing and marketing financial products (including the Core Notes, M+ Notes, IPO Capital, IPO Wealth Fund, and Australian Property Bonds) to investors without proper licensing, making misleading or deceptive representations about those products (notably as to security, risk, and liquidity), using new investor funds to pay old investors without adequate disclosure, and failing to manage investor funds with appropriate...

Court Disposition

Orders made granting injunctions restraining Mr Mawhinney and related parties from engaging in certain financial product activities for a period of 20 years; other relief, including costs, as set out in the formal orders.

Orders

  • ['For a period of 20 years from the date of these Orders, the Second Defendant, by himself, his servants, agents, employees and any company of which he is an officer or member, is restrained from soliciting, receiving, or advertising funds in connection with any financial product (other than certain exceptions for...