GetSwift, directors misled market: judge

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A judge has found tech company GetSwift and directors including ex-AFL player Joel Macdonald breached corporate law multiple times when the former "market darling" was listed on the Australian Stock Exchange.

In an 859-page judgment delivered on Wednesday, Federal Court judge Michael Lee concluded GetSwift made 40 misleading statements and breached its continuous disclosure obligations 22 times when making statements to the ASX in 2017.

He found Mr Macdonald and Bane Hunter failed to meet their obligations as directors due to their involvement in the ASX announcements and they were both knowingly concerned in multiple continuous disclosure breaches made by GetSwift.

Former GetSwift director Brett Eagle was also found to have been knowingly concerned in a few continuous disclosure breaches.

Justice Lee said there was "a public-relations-driven approach to corporate disclosure on behalf of those wielding power within the company, motivated by a desire to make regular announcements of successful entry into agreements with a number of national and multinational enterprise clients".

GetSwift announced to the market a series of agreements with clients, including Amazon and Commonwealth Bank, for the use of its software-as-a-service platform.

But the Australian Securities and Investments Commission, which prosecuted the company and directors, said these clients were only trialling, or contemplating a trial of, the GetSwift platform and the agreements when announced were not generating revenue.

Over the period of the announcements, GetSwift's share price rose almost 800 per cent.

GetSwift also raised $100 million in capital from institutional investors, including $75 million in December 2017 when the company's share price was close to its peak of $4.30.

A year later the share price had dropped to 52 cents.

ASIC said it will now seek pecuniary penalty orders against GetSwift, Mr Hunter, Mr Macdonald and Mr Eagle. ASIC will also seek orders disqualifying the trio from managing corporations.

Justice Lee said the "former market darling" was no longer listed on the ASX and in an "unusual development" around the time evidence about liability concluded in the proceedings entered into a scheme to re-domicile in Canada.

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