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ANZ breached its continuous disclosure obligations during a controversial $2.5 billion equity capital raising almost a decade ago, that was the subject of a criminal cartel case, the Federal Court ruled on Wednesday morning as it struck out the bank’s appeal.
The bank failed to overturn last year’s Federal Court judgment that found ANZ should have told the market the three investment banks that underwrote its 2015 capital raise took up more than 25 million of ANZ’s unsold shares.
ANZ was found to have breached its continuous disclosure obligations during a controversial $2.5 billion equity capital raising almost a decade ago.Credit: Oscar Colman
ANZ had used Citi, Deutsche Bank and JPMorgan to underwrite the placement.
In a judgment handed down on Wednesday morning, Justices Brigitte Markovic, Michael Lee and Catherine Button dismissed ANZ’s appeal, and ordered the bank to pay the corporate regulator’s costs. The Federal Court last year handed down a $900,000 fine in December.
“Listed entities have an obligation to disclose immediately information concerning the listed entity that is not generally available and that a reasonable person would expect, if generally available, to have a material effect on the price or value of the entity’s securities (subject to certain expectations),” Lee wrote in his judgment.
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“A reasonable person is taken to expect information to have a material effect on the price or value of securities where the information would or would be likely to influence persons who commonly invest in securities in deciding whether to acquire or dispose of those securities.”
The competition watchdog in 2018 launched an investigation after JPMorgan self-reported to the Australian Competition and Consumer Commission on the alleged cartel it was involved in. Because the US investment bank reported ahead of any of the other banks, it was able to obtain immunity from prosecution.
That investigation had alleged the bankers agreed over telephone calls following the capital raising how $791 million worth of excess shares would be offloaded on the market to keep a floor under ANZ’s share price. The ACCC referred the case to the Commonwealth Director of Public Prosecutions, but the charges were dropped two years ago.