The Australian Federal Court has sentenced the former CEO of AI marketing company Metigy Pty Ltd, David Fairfull, to nine years’ imprisonment following an investigation by the Australian Securities and Investments Commission (ASIC) into misleading conduct and the misuse of company funds.

The Federal Court today convicted Mr Fairfull on one count each of making false and misleading statements to investors and dishonestly using his position as a director for personal gain.

Mr Fairfull was sentenced to seven years and six months’ imprisonment for making false or misleading statements to investors and three years’ imprisonment for using his position as a director dishonestly.

18 months of the sentence was ordered to be served concurrently.

As a result, the total sentence imposed by the court was nine years imprisonment with a non-parole period of five years and four months.

The offending related to multiple capital raising activities between 2018 and 2021 during which investors contributed significant funds to Metigy based on false representations about the company’s financial performance, including:

• three capital raisings between October 2018 and October 2020, which raised approximately $23.4 million,
• a secondary share sale in July 2021, which raised approximately $15.7 million, and
• a proposed capital raising of $50 million.

In total, investors paid just over $39 million based on Mr Fairfull’s sustained and repeated misleading statements.

In November 2021, Mr Fairfull also dishonestly used his position as a director to cause $7.7 million to be lent by Metigy to fund the purchase of residential real estate for his personal benefit.

In sentencing Mr Fairfull, Justice Abraham said his acts were ‘deliberate, premeditated, sophisticated and rational ones to achieve a purpose.’