ASIC cancels AFSL of financial services firm
The corporate regulator has cancelled the AFS licence of a Perth-based firm linked with the Mayfair 101 Group.
In a public statement, ASIC said it has cancelled the Australian Financial Services Licence (AFSL) of Perth-based Quattro Capital Group and banned its director, Grant Stewart Gibson, from controlling a financial services entity for eight years.
Quattro was the AFS licensee of a number of authorised representatives, including representatives who were part of the Mayfair 101 Group and issued debentures promoted by Mayfair 101. Mr Gibson is the sole director of Quattro and its responsible manager.
In March 2021, the Federal Court found that four Mayfair 101 Group entities that were corporate authorised representatives of Quattro had engaged in misleading or deceptive conduct and made false or misleading representations when promoting Mayfair’s debenture products.
In its statement, ASIC stated that Quattro had failed to maintain the competence to provide financial services and properly supervise its representatives and ensure they were adequately trained or competent to provide the financial services covered by Quattro’s licence.
It also found that Quattro had failed to have adequate human and financial resources and risk management systems and comply with financial services laws by not lodging its annual financial statements with ASIC for the 2016-2020 financial years in the required time frame.
ASIC also stated that Quattro had failed to ensure that the financial services covered by its licence were provided efficiently, honestly and fairly.
ASIC found that Mr Gibson was involved in Quattro’s contraventions of financial services laws and is not competent to control an entity that carries on a financial services business.
Quattro and Mr Gibson have the right to seek a review of ASIC’s decision in the Administrative Appeals Tribunal.
In April last year, the Federal Court restrained James Mawhinney, an individual representative of Quattro, from advertising and soliciting funds in relation to financial products for 20 years in April last year.
The Federal Court found that Mr Mawhinney acted with “total disregard” for the corporations and ASIC acts and that his contravention are “of a very serious kind and warrant a very substantial period of restraint”.
In handing down his decision, Justice Anderson stated: “Mr Mawhinney accepted funds from new investors for the purpose of making interest and redemption payments to old investors, when there was a real likelihood that the subsequent investors would lose some or all of their monies.
“Subsequent investors were not informed that their invested funds would, could or might be used to pay distributions to current investors.”
On 22 December 2021, the court ordered the four Mayfair 101 Group entities to pay penalties of $30 million for misleading advertising. The Mayfair 101 Group entities have appealed the orders.
Miranda Brownlee is the deputy editor of SMSF Adviser, which is the leading source of news, strategy and educational content for professionals working in the SMSF sector.
Since joining the team in 2014, Miranda has been responsible for breaking some of the biggest superannuation stories in Australia, and has reported extensively on technical strategy and legislative updates.
Miranda also has broad business and financial services reporting experience, having written for titles including Investor Daily, ifa and Accountants Daily.