Australia Court Extends Asset Freeze in ASIC Case Against First Mutual and Gregory Cotton

The Federal Court of Australia has extended restrictions preventing First Mutual Private Equity and its director, Gregory Raymond Cotton, from accessing their assets. The decision comes as the Australian Securities and Investments Commission continues its inquiry into how investor funds were managed. At the center of the case is whether money raised for investment was directed as promised, or whether it flowed into other activities. By keeping the freeze in place, the court gives regulators and investors confidence that assets will be preserved while questions are answered.

What the court decided

The original freezing orders were made in mid-August. On 10 September, the court confirmed those restrictions would stay in force by consent. This prevents First Mutual and Cotton from transferring money, creating new liabilities, or moving funds outside Australia until further notice.

Property and other assets are also included. The orders are protective rather than punitive, designed to hold everything steady while the facts are reviewed.

Why ASIC stepped in

Between March 2024 and July 2025, First Mutual and its director are believed to have received about A$53 million from investors. These funds were collected under the banner of private equity investment. ASIC has said it has not yet found evidence of investment activity on the scale expected. Instead, it is considering whether some of the money was directed into gambling, including online casinos.

Many of the best online casinos, as noted by CasinoBeats gambling writer Wilna Van Wyk, offer access to thousands of games, rapid payouts, and generous bonuses like welcome rewards, cashback offers, free bets, and loyalty programs can see large sums circulate quickly, making them harder to track. The regulator has not drawn final conclusions, and the investigation is ongoing. This line of inquiry highlights ASIC’s concern that investors may not have received the level of transparency expected, and that closer scrutiny is needed before confidence can be restored.

What must Cotton and the company disclose?

To move the process forward, the court has ordered Cotton to submit an affidavit by 25 September. This must outline his assets, liabilities, income, and debts in detail. First Mutual must also file a financial statement signed by an authorized officer. These disclosures allow the court and ASIC to compare declarations with bank and transaction records. Consistency will clarify the picture for both the regulator and investors.

How wide does the freeze reach

The orders extend to accounts held in banks, building societies, and cryptocurrency platforms, along with physical property in Australia and abroad. This broad scope ensures no assets can be shifted while the inquiry is active. At the same time, allowances are in place. Cotton may access up to A$800 weekly for personal living costs, and funds can be used for legal fees once notice and evidence are provided. These measured exceptions show that the freeze is balanced to protect investors while respecting basic needs, while also reflecting ASIC’s concern that possible investment fraud must be guarded against until the full facts are established.

What this means for investors

For those who placed capital with First Mutual, the extension of the freeze helps safeguard what is left while the inquiry unfolds. Investors gain some comfort knowing assets cannot be moved out of reach. The key unknown remains whether the full amount raised can be accounted for. ASIC has committed to updating investors when its investigation provides clear answers.

The stakes for First Mutual and its director

The orders raise the importance of full disclosure for Cotton and the company. Transparent, detailed statements could help ease concerns, while gaps or inconsistencies could extend the process. Possible outcomes range from a resolution that allows funds to be returned in an orderly way, through to stronger measures if irregularities are confirmed. The disclosures due at the end of September will shape which path is taken. For Cotton, it is a chance to set the record straight and show that he and the firm can account for what has happened. For investors, those filings could finally bring clarity after months of uncertainty. For the wider market, the response will stand as an example of how honesty and openness can either protect or damage a reputation.

Gambling activity under review

Gambling, including online sectors such as sports betting, horse racing, and, in certain territories, lotteries and keno, is legal and widely practiced in Australia and many other countries, supported by established industries and regulated environments. The concern in this matter is not gambling itself, but whether investor funds meant for specific investment purposes were used in a way that was not agreed upon. ASIC’s focus is therefore on clarity of use rather than on passing judgment about gambling as an activity.

Governance lessons for private capital

The case highlights how private equity firms must demonstrate clear record-keeping and transparency. Investors expect to know where their money goes and how it is used. When large sums are involved, good governance is not simply advisable but essential. The process now underway shows how regulators and courts can act to ensure that those expectations are met.

Practical effects of the freeze

The restrictions change how the firm and its director operate. New debts cannot be taken on, transfers are blocked, and property cannot be sold. These limits can feel restrictive, but are designed to protect value until clarity is reached. With personal allowances and legal cost provisions in place, the freeze still permits day-to-day life and the ability to respond to the case.

Timelines and next steps

The most immediate step is the 25 September deadline for sworn disclosures from Cotton and from First Mutual. Once filed, these will be matched against transaction data already collected by ASIC. That comparison will determine whether the freeze remains, whether it is narrowed, or whether further steps are taken. No end date for the freeze has been set, but it is clear that it will only remain while the court sees it as necessary for investor protection.

The wider message to markets

The decision to maintain the freeze shows how seriously the regulator takes its role in protecting investors. It makes clear that when doubts arise over the use of funds, the court has practical tools to keep assets safe until the facts are sorted. For other firms, long-term trust comes from open books and straightforward reporting.

This case also reminds the market that investor confidence can disappear quickly when clarity is missing. Managers who take the time to communicate openly and keep detailed records often find they avoid these situations altogether. Ultimately, transparency is not just a legal safeguard but a way to keep relationships strong and reputations intact.

Conclusion

The court’s decision to keep the freeze on First Mutual Private Equity and Gregory Cotton signals that ASIC is treating the matter with real weight and keeps the spotlight on a plain question of whether investors’ money went where they were told it would. Gambling appears in the file, but the issue here is clear records and proper use of funds, not a verdict on gambling itself. For investors, the freeze buys time and keeps assets in place while the facts are checked. The sworn statements due at the end of September should give a clearer picture and point to the next steps, whether that becomes a route to repayment or a longer legal process. At heart, this is about trust. Markets work when managers explain what they did, show the receipts, and answer hard questions. If those answers land, confidence can return.