Background
David Frazer Ewan Fairfull was the Chief Executive Officer and a director of the Metigy Group, an Australian software-as-a-service startup that used artificial intelligence to assist small-to-medium enterprises with digital marketing. The business depended on venture capital and subscriber revenue and, between late 2018 and mid-2022, conducted multiple capital raising rounds. In each round, Fairfull exclusively controlled the flow of financial information to prospective investors and share purchasers through data rooms, emails, and investor briefings.
From October 2018, Fairfull systematically falsified Metigy’s revenue, monthly recurring revenue (MRR), annual recurring revenue (ARR), and bank account statements. The fabrications escalated over time — from inflated application forms and investor decks, to forged National Australia Bank statements altered using PDF editing software, to investor updates claiming an ARR of $107 million against actual May 2022 revenue of zero. Completed capital raisings and a secondary share sale totalled approximately $39.08 million; an attempted Series B raise sought a further $50 million. All investors relied on the false information; had they known the true financial position, they would not have invested. In November 2021, while the fraud was ongoing, Fairfull withdrew $7.7 million from Metigy’s bank account — funds sourced almost entirely from the convertible note issuance — as an unsecured, uncommercial director loan to his private company, Fairfull Holdings. The money was used to help acquire a $10.5 million home in Mosman, NSW and a $7.7 million property in Wattamolla, Kangaroo Valley. According to the group’s administrator, the loan caused Metigy to become insolvent from 14 November 2021. Metigy entered voluntary administration on 29 July 2022, owing approximately $39 million to creditors.
Fairfull pleaded guilty on 4 November 2025 in the Local Court of New South Wales to two counts under the Corporations Act 2001 (Cth): Count 1 (making false or misleading statements likely to induce applications for financial products, contrary to ss 1041E(1) and 1311(1)) and Count 2 (dishonest use of his position as a director with intent to gain an advantage, contrary to s 184(2)). An earlier course of identical false-statement conduct from October 2018 to March 2019 was admitted and taken into account as a schedule offence under s 16BA of the Crimes Act 1914 (Cth).
The Court’s Holding
Abraham J convicted Fairfull on both counts and imposed the following sentences: 7 years and 6 months imprisonment on Count 1, commencing 19 June 2026; and 3 years imprisonment on Count 2, commencing 18 June 2032 — a total effective sentence of 10 years and 6 months. A single non-parole period of 5 years and 4 months was fixed pursuant to s 19AB(1) of the Crimes Act.
The Court characterised the objective seriousness of the offending as high. Count 1 was a rolled-up count capturing a continuing course of conduct spanning over three years (extended to nearly four years when the schedule offence was included), involving numerous discrete acts of falsification that escalated in scale and sophistication. The Director Loan the subject of Count 2 was unsecured, uncommercial, and diverted investor funds raised on the basis of the very false statements underlying Count 1, in breach of the convertible note subscription deed. Although Fairfull had repaid approximately $2.94 million of the loan, approximately $4.76 million remained outstanding at administration.
In fixing the sentences, the Court gave particular weight to general deterrence, noting that white-collar offending of this kind is difficult to detect, investigate, and prosecute, and that the Legislature’s substantial increases to the maximum penalties under ss 1041E and 184(2) — from 5 years to 15 years imprisonment, effective March 2019 — signalled a heightened view of seriousness. The Court acknowledged mitigating factors including the guilty plea, Fairfull’s lack of prior convictions, and personal circumstances, but found that in serious white-collar fraud cases such factors carry reduced weight.
Key Takeaways
- A CEO who fabricates financial data across multiple capital raisings over nearly four years, inducing approximately $39 million in investment, can expect a total effective sentence in excess of 10 years under the Corporations Act provisions as amended in 2019.
- The 2019 increase to a 15-year maximum penalty for both ss 1041E and 184(2) directly informs the sentencing range and reduces the utility of comparative authorities decided under the lower 5-year maximum.
- General deterrence carries particular weight in white-collar fraud sentencing; good character, lack of prior convictions, and prospects of rehabilitation — while relevant — attract reduced mitigating value precisely because those qualities enabled the offender to occupy the position of trust they abused.
- A director loan that renders a company insolvent and diverts investor funds in breach of subscription deed covenants — even one partly repaid — will be treated as a serious aggravating feature distinct from, and appropriately sentenced consecutively to, the underlying fraud.
- Rolled-up counts reflecting a continuing course of criminal conduct carry the same maximum penalty as a single offence but reflect greater objective criminality, justifying a higher sentence within the available range.
Why It Matters
This decision is a significant sentencing benchmark for Australian financial-markets fraud in the post-2019 penalty regime. The 10-year-6-month aggregate sentence — one of the longest imposed under the upgraded Corporations Act provisions — signals that courts will apply the enhanced legislative scale in earnest for sophisticated, prolonged investor fraud. The judgment reinforces that startup founders and executives who fabricate revenue and subscriber metrics to attract venture capital face the same condign sentencing principles as traditional corporate fraudsters, with general deterrence dominating the sentencing exercise.
For practitioners and compliance officers, the decision also highlights the systemic risk that a single individual controlling all investor-facing financial information poses to market integrity. The Court’s observation that the harm extends beyond direct victims to the investing public at large — undermining confidence in Australian financial markets as a whole — reflects the broad policy rationale underpinning chapter 7 of the Corporations Act and underscores ASIC’s and the CDPP’s focus on prosecuting AI-era capital-raising fraud with the full force of the reinforced penalty framework.