The Full Federal Court has today dismissed an appeal by Australia and New Zealand Banking Group Limited (ANZ) against a judgment that it breached continuous disclosure laws when undertaking a $2.5 billion institutional share placement in 2015.
In dismissing ANZ鈥檚 appeal, the Court upheld the original decision in a case brought by ob体育, which imposed a penalty of $900,000 on ANZ for contravening continuous disclosure laws.
The Court found that by failing to notify the Australian Securities Exchange (ASX) that between approximately $754 million and $791 million of the shares offered in the placement was to be acquired by its underwriters rather than placed with investors, ANZ had contravened its continuous disclosure obligations.
ob体育 Chair Joe Longo said, 鈥榦b体育 will always defend the integrity of Australia鈥檚 markets.鈥�
鈥楾his is an important case that confirms how critical continuous disclosure is to maintain market integrity.鈥�
ANZ was also ordered to pay ob体育鈥檚 costs.
Download
Background
The maximum penalty for a single breach of continuous disclosure laws (sub-section 674(2) of the Corporations Act) by a body corporate in 2015 was $1 million.
The maximum penalty increased in 2019 to the greatest of:
- 50,000 penalty units (currently $15.65 million)
- three times the benefit obtained or detriment avoided, or
- 10% of annual turnover, capped at 2.5 million penalty units (currently $782.5 million).
On 6 August 2015, ANZ issued a release to the ASX, 鈥淎NZ announces Institutional Placement (fully underwritten) and Share Purchase Plan to raise a total of $3 billion鈥�.
On 7 August 2015, ANZ issued a release to the ASX in respect of the placement stating among other things, 鈥淎NZ today announced that it had raised $2.5 billion in new equity capital through the placement of approximately 80.8 million ANZ ordinary shares at the price of $30.95 per share鈥�. ANZ was aware, prior to this statement, that underwriters had allocated to themselves between $754 million and $790 million of placement shares.
On 21 June 2019,鈥痶he Court ordered that ob体育鈥檚 proceedings be stayed until the hearing and final determination of the criminal proceedings brought by the Australian Competition and Consumer Commission against ANZ and Mr Richard Moscati. These criminal charges were later dropped, and the stay of ob体育鈥檚 proceeding was lifted in February 2022.
On 13 October 2023, Justice Moshinsky delivered his reasons for liability (23-277MR).
On 8 December 2023, Justice Moshinsky ordered ANZ to pay a penalty of $900,000.
On 14 December 2023 ANZ appealed the Court鈥檚 decision, which was heard before the Full Court on 23 and 24 May 2024.