David Fairfull, the former CEO of AI marketing company Metigy, has pleaded guilty to making false and misleading statements, according to corporate regulator ASIC.
He also admitted to one count of dishonestly using his position as a director to gain an advantage.
Metigy, the Australia-based, machine-led marketing platform, went into voluntary administration earlier this year leaving its 75 staff without jobs.
Metigy was founded in 2015 by Fairfull, a former We Are Social managing partner, and Johnson Lin.
The Metigy group of companies during 2018 to 2021 developed a software product designed to harness advances in artificial intelligence to assist small to medium businesses with digital marketing strategies.
ASIC said Fairfull provided false information about the revenue and income of the companies to potential investors and used his position as a director to obtain a loan for his own personal benefit.
The statements related to three capital raises between October 2018 and October 2020 which raised about $23.4 million from investors.
And a secondary share sale in July 2021 in which investors paid about $15.68 million for shares
The third raise was planned to gather capital of $50 million.
In November 2021, ASIC said Fairfull dishonestly used his position as a director of one of the Metigy companies to lend $7.7 million from Metigy to finance the purchase of real estate for himself.
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.
Investigations by liquidators Simon Cathro and Andrew Blundell of Cathro Partners show Metigy relied almost entirely on capital injections to run its business.
Fairfull first appeared in the Downing Centre Local Court on November 8 last year.
The matter was committed to the Federal Court of Australia on November 17 for a first case management date.
The matter is being prosecuted by the Office of the Director of Public Prosecutions following a referral from ASIC.
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