We recently commented on the rise and fall of GetSwift Limited (GetSwift), in connection with an investigation by the Australian Securities and Investments Commission (ASIC) for purported failures by GetSwift to comply with its continuous disclosure obligations under the Corporations Act 2001 (Cth) (Corporations Act).
ASIC has now commenced proceedings in the Federal Court of Australia against GetSwift and its directors Mr Bane Hunter and Mr Joel Macdonald.
ASIC alleges that GetSwift made representations in a number of ASX announcements made between February and December 2017 regarding certain key contracts which were misleading, and that GetSwift failed to notify ASX of material information in relation to those agreements. ASIC also contends that GetSwift's directors, Mr Hunter and Mr Macdonald, were either involved in GetSwift's failure to meet its obligations or failed to discharge their duties to GetSwift with the requisite degree of care and diligence that a reasonable person in their respective positions would exercise.
ASIC is seeking:
- declarations that GetSwift, Mr Hunter and Mr Macdonald contravened provisions of the Corporations Act;
- orders that GetSwift, Mr Hunter and Mr Macdonald pay penalties to the Commonwealth; and
- that Mr Hunter and Mr Macdonald be prohibited from managing a corporation for such period as the Court thinks fit.
GetSwift's circumstances are a timely reminder to directors of the serious nature of continuous disclosure obligations and the personal liability which directors may attract. Given ASIC's increasing focus on regulatory misconduct following the Royal Commission, we at McCullough Robertson will be watching the outcome of this action by ASIC closely and with great interest.
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