No Swift Judgement for GetSwift

Concluding the 5 year long legal saga in ASIC’s regulatory action against GetSwift Limited, and three of its directors, a scathing 859 page judgment was handed down late 2021. The defendants were found personally liable for 166 breaches of misleading and deceptive conduct and director duties. If you’re not too keen on reading the 859 page judgment, read our much briefer synopsis so you don’t find yourself in the same position as these directors.

The action brought by ASIC culminated multiple ongoing class actions brought against the software-for-a-service company by shareholders and themselves, alleging breaches of the continuous disclosure obligations and misleading and deceptive conduct of a financial product found in both the Corporations Act 2001 (Cth) (Corporations Act) and the Australian Securities and Investment Commission Act 2001 (Cth) (ASIC Act). [1] Both groups of plaintiffs were holding the technology company accountable for making a series of misleading announcements about partnerships with a number of national and multinational enterprise clients throughout 2017.  

Directors Mr Bane Hunter, Mr Joel Macdonald, and former director Mr Brett Eagle, were all also pursued as defendants personally being held accountable for their own actions in orchestrating these announcements as additional breaches of their director duties in the Corporations Act. [2]  

The Plot  

GetSwift was criticised by the court for its approach to market disclosure in its attempts to drive up the company’s share price by making not-so-accurate announcements throughout the year of 2017. The company announced to its investors that it had secured lucrative contracts with the likes of Amazon, Commonwealth Bank, Fantastic Furniture, Yum Brands and The Fruit Box Company, when in actual fact, these engagements were trial periods leading to little successful adoption.  

What was described by Justice Lee as a “public relations-driven approach” to corporate disclosure, significantly raised the share listing price from $0.20c in 2016, to more than $4.00 a year later in 2017. The Amazon announcement alone caused GetSwift’s shares to jump 84% the very next day.  

Shortly after, the ASX momentarily suspended GetSwift’s trading until more detail was provided to clarify the Amazon arrangement. The technology company responded saying that the partnership would be a “global master services agreement,” after which the ASX lifted the suspension. Ten days later, the company raised $75 million issuing 18.75 million shares.  

Since becoming listed, GetSwift has made more than 18 announcements, most only detailing new partnerships. At its peak, the company was valued on the ASX at $800 million, despite generating revenue of only $290,301 in 2017. 

In January 2018, it was revealed by an Australian Financial Review investigation that GetSwift failed to advise the market that two of its customers, Fantastic Furniture and The Fruit Box Company, had walked away from GetSwift after an initial trial period. The company requested and was granted a trading halt until they responded to the claims regarding its alleged (at the time) misleading operations. Soon after, the ASX extended the suspension while they undertook their own investigative enquiries, and remained so.  

By late February, GetSwift’s shares had plunged below $0.70c and was under further investigation by ASIC. Since then, its share price has not surpassed $0.85c. 

The Court’s View 

Despite the “skilful submissions” by the GetSwift defendants, Justice Michael Lee was unwavered in his view of what really went on behind the scenes at GetSwift after a close review of the documentary records submitted to court.   

It was clear to Justice Lee that the directors on multiple occasions knowingly made decisions to withhold ASX announcements until a more “opportune moment” was available.  

“There was a plethora of documentary evidence in the form of emails exchanged between some of the directors revealing efforts directed at the strategic timing of ASX announcements, making sure the announcements were marked as price sensitive, orchestrating simultaneous media coverage and evincing an appreciation the failure to release announcements of new client agreements could have a negative impact on investor expectations.” [pp 9].  

Of the evidence brought forward by ASIC, GetSwift’s own marketing catalogue stated it would only announce to the market agreements when the financial benefit of the deal was “secure, quantifiable and measurable”. 

Justice Lee added that the effect of the crafted, and not at all realistic, announcements omitting to disclose the unsuccessful ventures and afford a clear operating history, unjustly affected potential investors’ decision making in “assessing the true value” of the software-for-a-service company at the time.  

The Liabilities 

Ultimately GetSwift alone was found to have breached the disclosure requirements of s 674 of the Act 22 times, and also the misleading and deceptive conduct of a financial product sections of 1041H in the Corporations Act and s 12DA in the ASIC Act on 40 incidences jointly. 

The court also held the three defendants individually liable for their actions and omissions as all three were “knowingly involved” in the breaches of both the Corporations Act and ASIC Act.  

Mr Hunter was found to have breached:  

  • the disclosure requirements 16 times,  
  • the misleading or deceptive conduct 29 times, and  
  • his director duties to exercise powers and discharge duties with care and diligence of s 180 in the Corporations Act. 

Mr Macdonald was found to have breached:  

  • the disclosure requirements 20 times,  
  • the misleading or deceptive conduct 33 times, and  
  • his director duties to exercise powers and discharge duties with care and diligence of s 180 in the Corporations Act. 

Mr Eagle was found to have breached:  

  • the disclosure requirement 3 times, and  
  • his director duties to exercise powers and discharge duties with care and diligence of s 180 in the Corporations Act. 

The Lessons 

It is very unlikely we will get a sequel to this saga, as GetSwift has since been delisted from the ASX, but it is important to highlight the takeaways to avoid a potential spinoff. 

Although it is common for entrepreneurial start-up owners to be enthusiastic and highly optimistic at times to prospective clients, it is important to know where the line is drawn to avoid corporate regulators on your tail. The likes of ASIC and other regulatory bodies getting involved to investigate matters are typically seen for particularly egregious actions. It is far from a stretch to say that utilising the ASX and corporate disclosure requirements to deceive investors as a coordinated marketing tool and PR bulletin board to raise millions is one such egregious matter. 

This case also clearly exemplifies the very clear difference and obligations set on the roles of directorships from those of PR. There are fundamental governance guidelines that are crucial to be in place and abided by directors in order to deter the kinds of corrupt actions that took place in the GetSwift case. It is more evident than ever the importance of good governance practices, compliances and accountabilities in companies undertaken by their directors. This case showcases how it can affect even the likes of your main market as an ASX company, aka investors, and how to not prejudicially affect their decision making.

The Aftermath

Despite the latest costs order, which subsequently agrees with an arranged deal with ASIC and Mr Eagle, the end to this saga is not over. Justice Lee granted leave for an appeal to the liability tome that is his judgment for the defendants available until 18 February 2022. Before this saga can run its end, the quantum of penalties against the four defendants is yet to be determined; check back in due course for any developments.  

Even though GetSwift is now trading on Canada’s NEO exchange, it might be wise to think twice ‘aboot’ investing abroad; to clarify, this is not financial advice. 



[1] ss 674(2) and 1041H Corporations Act 2001 (Cth); s 12DA Australian Securities and Investment Commission Act 2001 (Cth).

[2] s 180(1) Corporations Act 2001 (Cth). 

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