Director blew $900k on bets in one afternoon amid $134m scam

TL;DR

Investment director Gregory Cotton allegedly gambled away over $59 million of investor funds from First Mutual Private Equity.
He reportedly lost $900,000 on horseracing bets in one afternoon on Anzac Day, part of $80 million total gambling spend.
ASIC probe reveals no real investments from $131 million raised, leaving $7 million in assets for around 400 investors.

The story at a glance

A director of First Mutual Private Equity, Gregory Raymond Cotton, allegedly misused up to $131 million raised from about 400 investors since January 2020, meant for ASX share investments to pay interest and principal. Instead, ASIC says around $80 million went to gambling—with losses of $51 million—and $67 million paid earlier investors, in what looks like a Ponzi setup with no actual investments found. The article draws on a receivers' report detailing a $900,000 horseracing loss on one Anzac Day afternoon, fake staff, and cash-in-paper-bag payments. This comes amid ongoing Federal Court actions, including asset freezes since August 2025 and receivers appointed in December 2025.[[1]](https://asic.gov.au/about-asic/news-centre/find-a-media-release/2025-releases/25-306mr-federal-court-appoints-receivers-over-the-assets-of-gregory-raymond-cotton-and-first-mutual-private-equity-pty-ltd)[[2]](https://asic.gov.au/about-asic/asic-investigations-and-enforcement/enforcement-activities/first-mutual-private-equity-pty-ltd)[[3]](https://www.theaustralian.com.au/business/company-director-allegedly-blew-900000-on-bets-in-one-afternoon/news-story/0e79dc1fd0a22e8e5a4dcd71f6c665c2)

Key points

Cotton and his firm First Mutual Private Equity raised $131 million from 400 investors over 2020-2025, promising ASX investments with quarterly interest and principal returns.[[2]](https://asic.gov.au/about-asic/asic-investigations-and-enforcement/enforcement-activities/first-mutual-private-equity-pty-ltd)
No ASX or other investments found; $80 million spent on gambling ($51 million lost), $67 million used for payouts to keep earlier investors happy.[[2]](https://asic.gov.au/about-asic/asic-investigations-and-enforcement/enforcement-activities/first-mutual-private-equity-pty-ltd)
Receivers' report claims $59 million total investor gambling losses, including $900,000 horseracing binge in one afternoon on Anzac Day.[[3]](https://www.theaustralian.com.au/business/company-director-allegedly-blew-900000-on-bets-in-one-afternoon/news-story/0e79dc1fd0a22e8e5a4dcd71f6c665c2)
Other allegations: fake staff payments and cash handed over in paper bags to hide transactions.
ASIC secured asset freezes in August 2025 ($53 million initially flagged), extended multiple times; receivers from Deloitte appointed December 2025 to trace assets, finding only $7.1 million left.[[1]](https://asic.gov.au/about-asic/news-centre/find-a-media-release/2025-releases/25-306mr-federal-court-appoints-receivers-over-the-assets-of-gregory-raymond-cotton-and-first-mutual-private-equity-pty-ltd)
Firm operated without needed financial services licence; Cotton disputes some receiver findings, allowed $250,000 from frozen funds for legal costs.[[2]](https://asic.gov.au/about-asic/asic-investigations-and-enforcement/enforcement-activities/first-mutual-private-equity-pty-ltd)

Details and context

The scheme targeted investors with promises of steady returns from ASX trades, but ASIC found zero evidence of buys—funds cycled into gambling and payouts, classic Ponzi signs where new money covers old promises. Receivers Robert Woods and Salvatore Algeri of Deloitte SRT reported in February 2026 (redacted version released March), identifying loans to third parties as possible remaining assets amid the $134 million total shortfall.[[3]](https://www.theaustralian.com.au/business/company-director-allegedly-blew-900000-on-bets-in-one-afternoon/news-story/0e79dc1fd0a22e8e5a4dcd71f6c665c2)[[1]](https://asic.gov.au/about-asic/news-centre/find-a-media-release/2025-releases/25-306mr-federal-court-appoints-receivers-over-the-assets-of-gregory-raymond-cotton-and-first-mutual-private-equity-pty-ltd)

Court hearings continue, with Hass Group (investor party) joined; freezing orders block further payouts, protecting the $7 million pot. Cotton, Melbourne-based, faces probe for unlicensed services and director breaches—no charges yet, but investigation ongoing since mid-2025.[[2]](https://asic.gov.au/about-asic/asic-investigations-and-enforcement/enforcement-activities/first-mutual-private-equity-pty-ltd)

This fits a pattern of unlicensed investment scams in Australia, where high returns lure retirees; ASIC warns via its site, no individual advice given.

Key quotes

None reliably sourced from visible article or official releases.

Why it matters

Hundreds of mainly retail investors face massive losses from a scheme promising safe ASX gains but delivering gambling addiction fallout instead. It underscores risks of unlicensed operators and Ponzi-like payouts, eroding trust in private equity for everyday savers. Watch court hearings through April 2026 and any ASIC charges or asset recoveries, though full repayment looks unlikely given the $51 million gambling hole.[[2]](https://asic.gov.au/about-asic/asic-investigations-and-enforcement/enforcement-activities/first-mutual-private-equity-pty-ltd)