ASIC wins key appeal
The Australian Securities and Investments Commission has succeeded in establishing the broad extent of an important section of the Corporations Act as a result of a successful Federal Court appeal.
The successful ASIC appeal related to section 2041H of the Corporations Act and, according to the regulator, confirms its view that misleading or deceptive conduct can extend to statement made by a company or its officers to the Australian Securities Exchange (ASX) about its products or services even if the statements do not expressly refer to share or securities in the company.
The Full Federal Court appeal related to orders made by Justice Goldberg last year dismissing an ASIC claim against Ravi Amrit Narain of Victoria, a former director of Citrofresh International Limited.
The appeal judges concluded that the trial judge erred in finding that an announcement made to the ASX did not relate to a financial product because its contents did not refer to or deal with shares in the company.
The Appeal Court found that there was sufficient connection between the states and the company’s shares because their content concerned the business of the company and were published on the exchange where the shares were traded.
AUTHOR
Mike Taylor
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