Key Moments:
- Australia’s Federal Court has extended freezing orders against First Mutual Private Equity and its director amid an ASIC investigation.
- ASIC alleges approximately AU$53 million may have been diverted to gambling activities instead of legitimate investments.
- Both Gregory Raymond Cotton and First Mutual are required to disclose all assets and liabilities by 25 September.
Overview of Freezing Orders
The Federal Court of Australia extended asset freezing measures against First Mutual Private Equity and its director, Gregory Raymond Cotton, after allegations of investor fund misuse. ASIC is investigating claims that up to AU$53 million intended for investments went to gambling platforms.
Details of the Court’s Actions
The court approved the extension on 10 September, continuing restrictions first imposed on 15 August. The orders prevent First Mutual and Cotton from making bank transactions, taking on new obligations, or transferring money out of Australia. Limited funds are allowed for living and legal expenses.
| Party | Amount Allegedly Misused | Period Investigated | Court Orders |
|---|---|---|---|
| First Mutual Private Equity & Gregory Raymond Cotton | AU$53 million (US$34.1 million) | March 2024 – July 2025 | Asset freezing; disclosure requirements |
ASIC’s Allegations and Disclosure Requirements
ASIC reports that Cotton and First Mutual received about AU$53 million between March 2024 and July 2025, supposedly for investments. The commission found no evidence of actual investment activity and suspects much of the money went to gambling platforms.
Cotton must submit a sworn affidavit by 25 September listing all assets, liabilities, income sources, and debts for himself and First Mutual. The company must also provide similar information through an authorized representative.
Implications for Regulatory Oversight
The case sheds light on potential regulatory lapses, as investor funds were collected for over a year prior to regulatory intervention. This situation raises concerns about the effectiveness of existing monitoring and investor protection systems in Australia’s private equity sector.
The ongoing investigation takes place amid broader efforts to enhance regulatory oversight across different financial and gambling sectors in Australia.
Investor Risk and Sector Impact
The situation emphasizes the importance of due diligence for investors dealing with private equity firms. It also demonstrates ASIC’s resolve to take legal action when there are questions over investor fund management. The investigation’s outcome may have implications for sector-wide regulation, investor confidence, and potential introduction of stricter compliance rules for investment companies.
The required financial disclosures from Cotton and First Mutual may shed further light on the alleged fund diversion and possible gambling losses.
- Author
Daniel Williams
