ANZ penalised in landmark continuous disclosure regime verdict
The Federal Court has issued a $900,000 penalty to ANZ in a landmark case over its breach of continuous disclosure obligations.
The Court declared that ANZ contravened section 674(2) of the Corporations Act in 2015 by failing to notify the ASX that ANZ shares, with a value of between approximately $754 million and $790 million of the $2.5 billion of ANZ shares offered in an institutional placement, were to be acquired by its underwriters.
Justice Moshinsky stated that the contravention is very serious, and a large penalty is required to achieve deterrence.
While it was penalised $900,000, the Court said the penalty could been as high as $780 million if the breach occurred nowadays as the rules around financial penalties were changed in 2019. In 2015, the highest financial penalty that could be imposed was $1 million.
ASIC deputy chair, Karen Chester, said: “This is a landmark case for ASIC. Today’s decision confirms the paramount importance of continuous disclosure. The penalty and remarks from the Judge today are a clear and resolute message to ANZ and the market that this conduct was very serious. It also confirms that a significant take-up of shares by underwriters (in a share placement) must be disclosed to the market and investors.
“ASIC will continue to enforce the continuous disclosure regime to ensure investors are provided material information to make informed investment decisions. Continuous disclosure is key to maintaining market integrity.”
ANZ was also ordered to pay ASIC’s costs of and incidental to the proceedings.
Recommended for you
Government has introduced a bill to Parliament to legislate the first stream of the QAR reforms.
ASIC now has a 1:1 ratio when it comes to court success in the enforcement of crypto activities and more action is expected as Treasury seeks to introduce a regulatory framework.
A leading governance body has hit out at “specialist interest groups proposing ad hoc law reform” when it comes to reforms of financial services legislation and believes an independent body is needed.
The release of ALRC’s final report into financial services legislation has highlighted financial advice as a “significant” focus as it seeks to reduce costs and help advisers understand their obligations, alongside the Quality of Advice Review.
Add new comment