First Mutual Private Equity Pty Ltd

Why has ASIC taken action to freeze the bank accounts and other assets of Mr Cotton and FMPE?

ASIC’s investigation indicates that in the period January 2020 to August 2025, Mr Cotton and FMPE raised around $131 million from investors which was to be invested on the ASX. The purpose of the investments was to generate returns sufficient to pay quarterly interest to investors and to repay the principal amounts when due.

In proceedings issued on 15 August 2025 (Proceeding), ASIC took court action to freeze the bank accounts and other assets of Mr Cotton and FMPE because of concerns identified in the course of an ASIC investigation that those funds had not been used for the intended purpose and that allegedly:

• instead, investor funds have been largely spent on gambling (around $80 million, with losses of around $51 million) and to fund payments owed to investors (around $67 million);
• no investment of the funds (on the ASX or otherwise) appears to have taken place; and
• only around $7 million in remaining assets can be presently identified.

The purpose of the orders is to prevent harm to investors, including to any new investors who may otherwise have invested in the Cotton and FMPE business.

The freezing orders remain in place until further order of the Court and prevent payments being made to investors.

Who is appearing at Court? What if I want to access the Court file? What if I want to appear or attend?

Presently, the parties are ASIC (the Plaintiff) and the Defendants, Mr Cotton and FMPE. By orders dated 5 November 2025, the Court has ordered that any person who wants to be:

• joined to the Proceeding (as a party); or
• to be granted leave to be heard at the next hearing (on 2 December 2025); or
• to have access to the Court File;

must make an application supported by evidence and submissions by 18 November 2025.

On 5 November 2025, the Court also ordered that the non-confidential affidavits and submissions filed at Court be provided to the lawyer (David Leggatt of Blue Rock Law) who was representing an FMPE investor group.

The time and location of the Court hearings can be found on the Federal Court website Daily Court lists. This information is usually made available the day before any hearing. The hearing is broadcast online (with a requirement that you are muted and off-camera) and anyone can attend the physical hearings in person (which take place at the Federal Court building in Melbourne (305 William Street).

What is the next step in the court proceedings?

ASIC’s application to appoint Receivers (which was due to be heard at a Case Management Hearing on the 2^nd December 2025), has been adjourned to the 15^th December 2025. At that hearing, ASIC will seek the appointment of a Receiver over the assets of the Defendants, with the intention of recovering any further assets that can be located so that these assets are also available to investors. The Court has the power to appoint a Receiver in circumstances where the defendant to a proceeding may be liable to pay money to another person.

What is ASIC investigating?

ASIC is investigating all aspects of the business operated by Mr Cotton and FMPE.

ASIC is concerned that Mr Cotton and/or FMPE (and others) may have carried on an unlicensed financial services business without holding the necessary licences, may have acted unlawfully as a director of FMPE and may have obtained funds illegally. The investigation is ongoing, and no conclusion has been reached that there has been any contravention. It is not possible to say, at this time, how long it will take ASIC to investigate the matter.

Can I expect to recover my investment? What is the status of my investment?

ASIC understands this is the primary concern of investors. While recovering investor funds is a priority, the position is legally complex and ultimately, the Court (not ASIC) will be required to decide the position. At this stage:

• ASIC cannot provide detailed information in relation to the timing or amount of any payments to investors; and
• as above, ASIC’s investigation to date has only been able to identify $7 million of the $131 million that appears to have been raised from investors since January 2020.

Am I required to take any steps at this stage?

No action is required from investors at this stage. It may be that ASIC will ask you to provide information in relation to the circumstances of your investment. In its investigations, ASIC typically relies on the assistance of investors to work out what happened and identify any enforcement action that may be appropriate.