Australia’s markets regulator, the Australian Securities and Investments Commission (ASIC), has initiated legal action against Dr Ben Greene, the co-founder and former CEO of defence technology company EOS (Electro Optic Systems). The lawsuit alleges that Greene withheld critical information about the company’s 2022 earnings, delaying the disclosure of a significant downturn in projected revenue.
The case, filed in the Federal Court on Tuesday, marks a significant development in corporate governance and transparency within Australia’s defence sector. EOS, a publicly listed company based in the Australian Capital Territory, specialises in remote weapons systems, including firearms, lasers, counter-drone systems, and space tracking technologies. The firm has contracts with governments, militaries, and commercial clients, with subsidiaries operating in the United States and New Zealand.
ASIC’s allegations centre on EOS’s revenue forecasts for 2022. Between May and June of that year, EOS informed the Australian Securities Exchange (ASX) that its expected revenue would equal or exceed $212.3 million. However, by 25 July 2022, the company had internally revised its revenue expectations downwards to $164 million, with a potential additional $27 million. This revised forecast was not disclosed to the ASX until 31 October 2022—more than three months later.
“By 25 July 2022, ASIC alleges that Dr Greene knew or should have known that the company’s 2022 revenue was likely to be substantially less than [$212.3 million] and that EOS was required to disclose an earnings update to the ASX,” ASIC stated. The regulator further alleged that Greene, who was CEO and a director of EOS at the time, failed to adequately inform the board and voted in favour of resolutions deferring the disclosure.
Greene stepped down as CEO on 31 July 2022, transitioning to a newly created role as the company’s head of innovation. At the time, EOS described the move as aligning with Greene’s wishes and the company’s future requirements. Greene, who began his career as a research scientist with the Australian government and later became the director of Australia’s space program, has been contacted for comment.
ASIC’s chair, Joe Longo, emphasised the importance of timely disclosure of material financial information. “ASIC will allege that Dr Greene was aware of a material change in the company’s guidance but fell short in his consideration of these financials and EOS’s requirements to disclose them to the ASX,” Longo said. “ASIC will not hesitate to act to uphold market integrity and support a fair and efficient financial system for all Australians in our public markets.”
Separately, EOS has admitted negligence in handling its revenue forecast information in 2022 and has agreed to pay a proposed penalty of $4 million, subject to Federal Court approval. This penalty reflects the seriousness of the contravention while acknowledging EOS’s cooperation with ASIC’s investigation and its early admission of liability.
EOS chair Garry Hounsell described the resolution as “a constructive outcome” that is “in the best interests of the company and its shareholders.” He noted that since late 2022, EOS has made significant progress in strengthening its business and remains committed to best-practice and transparent communication.
The legal action against Greene and the penalty accepted by EOS highlight the critical role of transparency in maintaining market integrity. As the defence technology sector continues to evolve, this case serves as a reminder of the legal and ethical responsibilities of corporate leaders in ensuring accurate and timely financial disclosures.