ASIC chair warns of increased media leaks and penalties
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The news: The chair of investments regulator ASIC says it has noticed an increased number of media 'scoops' about mergers and takeovers, and warned that those who leak information can be sued for damages.
Chair Joe Longo urged those working in investor relations to ensure they meet continuous disclosure obligations. This means following Corporations Act rules to prevent the leaking of confidential information that can give an unfair advantage in trading.
The context: Longo made the comments during a speech about the regulatory landscape at the Australasian Investor Relations Association Forum in Sydney on Tuesday.
He said steps to prevent leaks included:
- requiring consultants and contractors to sign confidentiality agreements
- having arrangements to handle inside information
- recording who has been provided inside information
- ensuring continuous disclosure obligations are being monitored and met.
Longo said continuous disclosure was fundamental to market integrity and ASIC was ready to act against poor practices.
The Federal Court this year ordered the largest penalty against a company for breaking continuous disclosure laws. Technology group GetSwift Limited was ordered to pay $15 million.
What they said: "We’ve ... recently observed an increase in media reporting ahead of fundraising and merger and takeover activity. I’d like to remind all market participants to be vigilant to the risk of leaks or mishandling of information," Longo said.
The source: ASIC speech
