Australian court freezes PE firm assets over ASIC gambling probe
Summary
Australia’s Federal Court has extended freezing orders against First Mutual Private Equity Pty Ltd and its director Gregory Cotton while the Australian Securities and Investments Commission (ASIC) investigates suspected misuse of investor funds for gambling. The orders — first made on 15 August and extended on 10 September by Justice Sarah Derrington — freeze bank accounts and bar the defendants from incurring new liabilities or transferring money from accounts.
Key Points
- Federal Court extended asset preservation orders against First Mutual and director Gregory Cotton amid an ASIC probe.
- ASIC alleges the defendants received about A$53m between March 2024 and July 2025, much of which is suspected to have been used for gambling rather than investments.
- The orders freeze bank accounts and prevent new liabilities or transfers; they were extended until further notice.
- Cotton must file a detailed affidavit by 25 September listing personal and company assets, liabilities, property and any security arrangements.
- The orders allow limited living expenses (up to A$800/week) and permit payment of legal costs with five days’ notice to ASIC.
- ASIC says it will provide investors with further updates when possible.
Content Summary
The Federal Court action is intended to preserve potential investor funds while ASIC seeks to determine whether monies received by First Mutual and Mr Cotton were channelled into legitimate investments or used for gambling. The regulator cannot identify underlying investments for the alleged A$53m and therefore sought freezing orders to prevent dissipation of assets. The court has required detailed disclosures and limited permitted outgoings to ensure funds remain available pending the investigation.
Context and Relevance
This case sits at the intersection of private equity, investor protection and gambling-related misconduct. For investors and advisers it highlights heightened regulatory scrutiny of fund flows and the obligations of fund managers and directors. The enforcement action also signals ASIC’s readiness to use court preservation orders to protect investor interests where fund deployment cannot be verified. The outcome could prompt tighter due diligence expectations across the PE sector and increased caution among institutional investors.
Why should I read this?
Short and blunt: if you invest in private equity, work in compliance, or track regulatory risk in financial services or iGaming, this is not background noise — it could affect fund credibility, investor recoveries and director liability. We dug out the essentials so you don’t have to wade through the full court docs: freezing orders, the A$53m figure, the 25 September disclosure deadline, and what the defendants can still pay. Worth a quick read if you want to know whether this could ripple into deals or due-diligence playbooks.
Source
Source: https://next.io/news/regulation/court-freezes-pe-firm-assets-gambling-allegations/