ASIC Investigates Private Equity Firm for Misusing Investor Funds in Gambling
ASIC Intensifies Probe into Private Equity Firm’s Financial Misconduct
The Australian Securities & Investments Commission (ASIC), Australia’s leading financial regulator, has intensified its investigation into First Mutual Private Equity. The firm is accused of diverting around $53 million raised from investors between March 2024 and July 2025 into gambling activities, rather than legitimate private equity investments as represented.
Federal Court Extends Asset Freezing Orders
The Federal Court has extended asset preservation orders originally issued on August 15, freezing the bank accounts of First Mutual and its director, Gregory Cotton. These orders prevent the firm and Cotton from incurring new liabilities and were extended without dispute. This extension gives ASIC more time to collect crucial evidence related to the case.
No Evidence of Investment Activities Found
ASIC’s investigation so far has revealed no legitimate investment transactions linked to the funds raised by First Mutual. This raises serious concerns that the money was never invested as promised. Instead, a significant portion is believed to have been lost through high-stakes gambling, leading to substantial financial losses.
Unclear Gambling Platforms, Possible Parallels to Past Cases
The regulator has not yet specified whether these gambling activities took place in casinos or online, but insiders suggest that much of the money was lost through wagering. This case appears similar to a 2023 incident where an Australian financial advisor was accused of gambling away nearly $700,000 of client funds.
Ongoing Investigation and Court-Ordered Disclosures
Gregory Cotton has been ordered by the court to submit a detailed affidavit by September 25, listing his assets, liabilities, income, and client relationships. This documentation is expected to support ASIC’s efforts to trace the misused funds and uncover any additional parties involved. It remains uncertain if investors will be compensated.
Limited Access to Frozen Funds
The court has allowed Cotton limited access to the frozen accounts, permitting withdrawals of up to $800 weekly for living expenses. Additionally, funds may be used for legal fees with a five-day advance notice to ASIC. The financial authority has pledged to update investors as the investigation progresses.
Extended Scope of Investigation
ASIC is broadening its inquiry to include transactions predating March 2024, hinting that the misappropriation could have been ongoing for a longer period. The regulator remains cautious about releasing further details to avoid compromising its investigation.
