ANZ loses ASIC market disclosure court battle, faces penalty hearing
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The news: ANZ has breached its market disclosure obligations, the Federal Court of Australia has ruled. Federal Court of Australia Judge Mark Moshinsky said the bank failed to disclose to the ASX in 2018 that three underwriters in a $2.5 billion share placement — JP Morgan Australia, Citi Group Global Markets Australia and Deutsche Bank — had acquired around almost a third of the shares.
The numbers: Approximately $791 million of the $2.5 billion of ANZ shares on offer during the share placement were acquired by the bank’s underwriters.
The context: ASIC took legal action against ANZ in 2018 over a 2015 capital raise, alleging the bank breached its continuous disclosure obligations.
ASIC alleged that the fact the underwriters allocated and acquired around 31% of the shares should have been disclosed to the market.
ASIC also alleged that the non-disclosed information was likely to influence investors in deciding whether to acquire or dispose of ANZ shares, given the amount of shares acquired by the underwriters and an expectation they would dispose of those shares to put downward pressure on the share price.
The share placement was also at the centre of a 2018 criminal cartel case, which collapsed before reaching a trial, with all charges dismissed. The cartel case had kept ASIC proceedings on hold until February 2022.
A penalty hearing in the matter will be scheduled following today's decision.
