David Fairfull, the former CEO of AI marketing company Metigy, has been charged with making false statements to investors and using his position as a director to gain an advantage for himself.
He has appeared in the Downing Centre Local Court to answer charges following an investigation by corporate regulator ASIC.
He is charged with five counts of making false and misleading statements contrary to s 1041E(1) of the Corporations Act 2001 and one count of dishonestly using his position as a director to gain an advantage contrary to s 184(2) of the Corporations Act 2001.
Metigy, founded in 2015 by Fairfull, a former We Are Social managing partner, and Johnson Lin, went into into voluntary administration in August 2022, leaving its 75 staff without jobs.
Investigations by liquidators Simon Cathro and Andrew Blundell of Cathro Partners show Metigy relied almost entirely on capital injections to run its business.
Part of a $20 million capital raise in 2021-- led by Cygnet Capital and including Regal Funds Management, OC Funds and Five V Venture Capital -- to expand the business then became a loan used to buy personal property.
Fairfull went bankrupt, according to the National Personal Insolvency Index. Records show this is his second run at bankruptcy. His first was 2006-2009.
The Metigy group of companies developed a software product designed to harness advances in artificial intelligence to assist small to medium businesses with digital marketing strategies.
ASIC alleges that Fairfull, while obtaining funding for the business, provided false information about the revenue and income of the companies to potential investors and further used his position as a director to obtain a loan for his own personal benefit.
"ASIC took this case as directors’ duties are an enduring priority for us. Company directors play an integral role in overseeing governance in addition to both performance and compliance and as such have a responsibility to act with integrity and honesty," said ASIC deputy chair Sarah Court.
The matter will return to the Downing Centre Local Court on December 10.
The matter is being prosecuted by the Office of the Director of Public Prosecutions (Cth) following a referral from ASIC.
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