Court rejects Gemi’s bid for watchdog to pay costs

By the Editorial Team · Tuesday, October 20, 2026

The Federal Court ruled that private credit firm Gemi Investments and ASIC must each pay their own legal costs after a dispute over ASIC’s request for Gemi’s legal documents was withdrawn. The decision leaves ASIC’s wider investigation into Gemi’s substantial loans to the collapsed Public Hospitality Group ongoing.

The Federal Court has ordered both private credit firm Gemi Investments and the Australian Securities & Investments Commission (ASIC) to bear their own legal costs following a brief legal dispute over the regulator's request for information.

The case, heard on Monday, arose after Gemi challenged ASIC’s demand for documents relating to legal advice obtained by Gemi concerning two investment funds. The lender, based in Sydney and led by George Fleming and Justin Epstein, initiated the lawsuit in August, about nine months after ASIC confirmed it was investigating the company.

ASIC’s inquiry into Gemi stems from the lender’s substantial financial backing of Jon Adgemis’s Public Hospitality Group, which collapsed after Gemi provided more than $400 million in loans. The collapse of Public Hospitality Group has drawn regulatory scrutiny given the size of Gemi’s exposure.

The legal action was triggered shortly after ASIC issued a formal direction requiring Gemi to disclose details of external legal advice related to its funds. However, ASIC revoked the direction notice just one day after the lawsuit was filed. On Monday, ASIC’s legal representatives described the withdrawal as a pragmatic move intended to avoid the costs of defending the proceedings.

Gemi subsequently sought an order for ASIC to pay both parties’ legal expenses, arguing that the regulator's decision to withdraw its demand demonstrated a lack of merit in the underlying action. Gemi’s counsel said ASIC had effectively admitted defeat by abandoning the information request.

Justice Michael Lee rejected this argument, instead ruling that each party should cover its own costs, including expenses related to the application over who should pay. The court’s decision leaves the ongoing ASIC investigation unaffected.

ASIC has not disclosed further details about the broader inquiry into Gemi, and the regulatory scrutiny into the firm’s lending practices, particularly in connection with the failed Public Hospitality Group, remains active.

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