Mr Andrew Ferguson, the former Chief Executive Officer of abalone farmer, Australian Bight Abalone (ABA), was today found guilty on 17 counts related to providing false or misleading information to the ABA Board of Directors and prospective investors following a jury trial in the District Court of South Australia.

Following an ASIC investigation, Mr Ferguson was charged with nine counts of disseminating false or misleading information to prospective investors, via grower reports, product disclosure statements and a media release issued by ABA during 2007 and 2008. The jury found that these documents contained false or misleading information about survival rates of the abalone and harvest prospects.

The remaining eight counts were related to providing false or misleading information to the directors of ABA, in reports submitted to the Board about operations at the ABA farm.

During the trial, the jury heard from a number of witnesses involved in the farming operation including marine biologists, operational staff, divers and former directors.

Acting ASIC Chair Peter Kell said, "Company officers are in a position of critical responsibility and trust, and it is expected that their behaviour is beyond reproach. This verdict sends an important signal that misleading investors will not be tolerated."

The matter has been listed for sentencing submissions before the District Court of South Australia on 18 April 2018.

Mr Ferguson's bail was today revoked and he has been remanded in custody. Mr Ferguson faces a maximum of five years' imprisonment and/or a fine of $22,000 for each count.

The matter is being prosecuted by the Commonwealth Director of Public Prosecutions.

Background

ABA was Australia's largest off-shore abalone farmer, raising about $44 million from 1400 investors over four years.  ABA operated an abalone farm in off-shore cages located near Elliston in South Australia between 2005 and 2009. The company also operated managed investment schemes (MIS), through which investors acquired interests in abalone grown at the farm, entitling them to returns from the sale of harvested abalone.

The initial MIS project was offered to wholesale investors only in 2005, but a MIS was offered to retail investors in each subsequent year between 2006 and 2009.

Administrators (McGrath Nicol) were appointed to ABA in July 2009 after the company had been able to undertake only a limited harvest of the abalone stock. The Administrators reported that a survey conducted of the abalone stock at the farm suggested significantly higher mortality than had been expected.

Mr Ferguson pleaded not guilty to the charges against him.

Editor's note:

On 7 February 2018, the defendant filed a Notice to appeal against conviction. The permission to appeal hearing is listed on 13 March 2018 at 10.00am in the Supreme Court.

Editor's note 2:

On 5 March 2018, the permission to appeal hearing was administratively adjourned to 26 March 2018 at 10.00am in the Supreme Court.

Editor's note 3:

On 26 March 2018, the permission to appeal hearing was administratively adjourned to 16 April 2018 at 10.00am in the Supreme Court.

Editor's note 4:

The permission to appeal hearing has been administratively adjourned to 30 April 2018 at 10.00am in the Supreme Court.

Editor's note 5:

The sentencing hearing of Mr Ferguson has been adjourned to 18 May 2018 at 9.30am in the District Court.

Editor's note 6:

The permission to appeal hearing has been administratively adjourned to 14 May 2018 at 10.00am in the Supreme Court.

Editor's note 7:

On 14 May 2018, the Court of Criminal Appeal granted Mr Ferguson permission to appeal against conviction. The date of the appeal hearing is to be determined.

Editor's note 8:

On 18 May 2018, the District Court heard sentencing submissions from Mr Ferguson and the Crown. The matter has been adjourned to 1 June 2018 at 9.30am.

Editor's note 9:

On 19 June 2018, the Supreme Court of Appeal heard submissions from Mr Ferguson and the Crown in relation to Mr Ferguson's appeal against his conviction. The decision has been reserved.

Editor's note 10:

On 22 June 2018, Mr Ferguson filed a Notice to Appeal against sentence. The permission to appeal hearing is listed on 16 July 2018 at 10:00am at the Supreme Court.

Editor's note 11:

The permission to appeal hearing (against sentence) has been administratively adjourned to 30 July 2018 at 10.00am in the Supreme Court.

Editor's note 12:

Prior to the hearing on 30 July 2018, Mr Ferguson withdrew his appeal against sentence. On 5 December 2018 the Court of Criminal Appeal dismissed Mr Ferguson’s appeal against conviction.

Read the judgement here