First Mutual unregistered MIS wound up

First Mutual Private Equity's (FMPE) unregistered managed investment scheme (MIS), which allegedly gambled $80 million of investor money, has been wound up by the Federal Court.

Justice Button approved ASIC's application to facilitate the orderly administration of any remaining assets and to have any available funds be identified and, where possible, returned to investors.

ASIC's investigation found FMPE director Gregory Cotton and FMPE raised around $131 million from investors which was to be invested on the ASX during the period January 2020 to August 2025.

Cotton told investors the investments would generate returns sufficient to pay quarterly interest and to repay the principal amounts when due.

While the investigation is ongoing, ASIC believes $80 million was largely gambled away, with losses accumulating to around $51 million and some $67 million represented as "payments to investors". Much of the gambling took place online, through betting agencies and at the Crown Casino.

The receivers also calculated funds were spent on general lifestyle expenditure, payment towards credit cards of $2.4 million, business expenditure and tax payments of $212,447. There was also a personal loan payment of $348,174. Currently, only $7 million of remaining assets can be identified.

The receivers found Cotton had been running FMPE since February 2014.

"The FMPE business is promoted as a 'commercial investment company' by referral only, whereby FMPE received deposits from investors who were offered interest rate returns on their investments that were much higher than those rates offered by commercial deposit taking financial institutions," Deloitte's report read.

It was also advertised as an "active investor and shareholder" with funds being used by FMPE to make its own investments, mostly investing in securities, private equity investment funds and real property to generate the offered returns.

Some 346 identified investors reported to have invested between 2014 and to August 2025.

Justice Button also appointed Robert Woods and Salvatore Algeri of Deloitte SRT as liquidators.

Liquidators will now take control of First Mutual, identify and recover available assets, assess claims, and, where funds are available, distribute them to creditors and investors.

Last year, the court froze FMPE's and Cotton's bank accounts and appointed Woods and Algeri as receivers.