The Federal Court has handed down the largest ever penalty against a company for breaching continuous disclosure laws, ordering GetSwift Limited (former ASX:GSW) (GetSwift) (in liquidation) pay a penalty of $15 million.
The Court described Getswift as a company that ‘became a market darling because it adopted an unlawful public-relations-driven approach to corporate disclosure instigated and driven by those wielding power within the company.’
GetSwift’s former director, CEO and executive chairman, Bane Hunter, was ordered to pay a penalty of $2 million and disqualified from managing corporations for 15 years. Former director Joel Macdonald was ordered to pay a penalty of $1 million and disqualified for 12 years. These are two of the highest penalties ordered against directors for corporate misconduct.
Brett Eagle, also a former director of GetSwift, has been ordered to pay a penalty of $75,000 and was disqualified from managing corporations for two years.
ASIC Deputy Chair Sarah Court said ‘Disclosure is critical to market integrity and consumer protection. The penalties imposed by the Court demonstrate the extent and seriousness of the misconduct in this matter and the importance placed by the Court on deterring others from engaging in similar behaviour. ASIC will continue to take action to hold companies and individuals to account for corporate misconduct of this kind.’
Justice Lee found Mr Hunter ‘had a laser-like focus on making money for himself and Mr Macdonald and if that involved breaking the law regulating financial markets, or exposing GetSwift to third party liability, that was of little concern to him.’
Justice Lee found Mr Macdonald was focussed on making money and had ‘little understanding or regard for his legal obligations as a director.’
In November 2021, the Court found that GetSwift made numerous misleading statements in its announcements on ASX and breached its continuous disclosure obligations on 22 occasions between February and December 2017 (21-298MR).
Mr Hunter, Mr Macdonald and Mr Eagle were found to have misled the market and were knowingly concerned in GetSwift’s continuous disclosure breaches. As a consequence, they breached their duties as directors.
GetSwift, Mr Hunter, Mr Macdonald and Mr Eagle have also been ordered to pay ASIC’s costs.
At the time of this misconduct, continuous disclosure (s674 of the Corporations Act) contraventions attracted a maximum penalty per contravention for a company of $1 million and for persons involved of $200,000. Higher penalties of up to $10.5 million for a company and $1.05 million for an individual were introduced in March 2019. Breaches of director’s duties (s180 of the Corporations Act) also attract penalties that can be handed down to an individual.
ASIC commenced civil proceedings against GetSwift, Mr Hunter and Mr Macdonald in February 2019 (19-039MR) and in March 2019 against Mr Eagle.
In January 2021, GetSwift delisted from the ASX and re-domiciled to Canada’s NEO Exchange after the Federal Court approved GetSwift’s scheme of arrangement to create a new Canadian holding company, GetSwift Technologies Ltd (Holdco), despite ASIC opposing the scheme. As such, from January 2021, GetSwift was no longer listed on the ASX.
In August 2022, GetSwift was placed in voluntary liquidation by Holdco.