Two men who oversaw a company that an Australian court called “the unacceptable face of start-up capitalism” have been permanently banned from financial markets in British Columbia.
In a pair of decisions issued last week and published online Tuesday, the B.C. Securities Commission imposed the reciprocal orders on Bane Hunter and Joel Richard Stewart Macdonald based on the findings of Australian courts and regulators.
The documents describe Hunter and Macdonald as directors of a company called GetSwift Limited, which was incorporated in Australia in 2015 and went public in 2016.
Australian sanctions
Described by the Federal Court of Australia as an “early stage tech company,” GetSwift lost money in every year of its existence, but nevertheless became a “market darling,” raising a total of A$104 million from investors.
“It became a market darling because it adopted an unlawful, public-relations-driven approach to corporate disclosure instigated and driven by those wielding power within the company,” according to an FCA decision quoted in both BCSC decisions.
Australian authorities found the company had engaged in 62 contraventions of that country’s securities laws, and shareholders launched a class-action lawsuit against it.
While those matters were before the courts, GetSwift sought permission to “redomicile” in Canada, according to the BCSC decisions. Part of the Australian court’s rationale for allowing it to do so was an undertaking that the B.C.-based Canadian successor company — GetSwift Technologies Limited — “would not take any steps to wind up GetSwift and would indemnify GetSwift in relation to penalties imposed in this case or in relation to an adverse judgment in the class action,” the FCA decision explained, as quoted in the BCSC decision on Hunter.
“The undertaking was not worth the paper it was written on,” the quoted decision continued, describing the company placing itself in voluntary liquidation in 2022. The move overseas and subsequent liquidation meant none of the Australian investors could get their money back.
The FCA decision described the incident as a “scandalous episode of corporate misconduct.”
In 2023, the Australian court imposed a A$2 million penalty on Hunter and banned him from managing corporations for 15 years. Macdonald received a A$1 million penalty and a 12-year disqualification.
The B.C. case
The BCSC has the authority to impose sanctions on people and businesses who violate securities laws in other jurisdictions, provided such reciprocal orders are deemed to be in the public interest.
In the case of Hunter and Macdonald, the BCSC’s executive director asked a panel of the commission to impose lifetime bans on both men.
Hunter opposed the imposition of sanctions in B.C., telling the panel that he “has never set foot in British Columbia,” is no longer involved in GetSwift Technologies and has no intention of participating in B.C.’s capital markets.
The panel was unconvinced, noting in its decision that Hunter was “instrumental” in the company’s decision to redomicile in B.C., and that there was nothing preventing him from accessing the province’s markets despite his misconduct in Australia.
The BCSC panel granted the executive director’s request for orders banning Hunter and Macdonald from B.C. markets.
The two men are “permanently prohibited from being a director or officer of any issuer or registrant, from becoming a registrant and from trading securities, except for accounts in their own names, among other restrictions,” according to a news release from the BCSC.
Macdonald was notified of the proceedings against him in B.C., but chose not to participate in the process, the panel’s decision against him notes.
