Updated: Nov 15, 2021
You get the impression that APRA had the right idea. As these actions against IOOF unfold, time will tell.
Full steam ahead for IOOF class actions
Aleks Vickovich - Reporter
AFR - Sep 24, 2019 — 6.18pm
Plaintiff law firms circling IOOF for shareholder losses in the wake of the banking royal commission will not be deterred by the wealth manager’s legal victory against the prudential regulator.
IOOF faces two class action lawsuits seeking damages for investors who lost shareholder value after misconduct, and enforcement action by the Australian Prudential Regulation Authority, was revealed at the inquiry and in media reports. The suits allege IOOF breached the Australian Securities Exchange’s listing rules by failing to disclose the regulatory intervention to shareholders.
Multinational litigation firm Quinn Emanuel filed proceedings against IOOF in the NSW Supreme Court in April with backing from US-based litigation funder Regency Group. Brisbane-headquartered Shine Lawyers weighing a suit open to investors who bought shares in IOOF between 29 April 2014 and 5 December 2018.
Both suits rely partly on allegations that IOOF and a number of its executives breached superannuation directors’ duties, claims brought by APRA and dismissed by the Federal Court on Friday 20 September.
Litigators said they are proceeding despite Justice Jayne Jagot’s decision against APRA last week.
“IOOF’s market capital dropped by hundreds of millions of dollars following the original disclosure of alleged misconduct in June 2015,” said Shine Lawyers' Craig Allsopp. “Even after the Federal Court’s decision last Friday IOOF is still trading well below its pre-June 2015 price.”
Mr Allsopp said he expects the judgment to have a “minimal” impact on the success of Shine’s intended suit, though he conceded there is some “overlap” between APRA’s case and its own investigation.
Quinn Emanuel partner Damian Scattini, a former Maurice Blackburn litigator, said the firm intends to proceed. “It’s clear that Her Honour was unimpressed at what she perceived as shortcuts,” he said. “I don’t think you can read much more into it than that.”
A statement issued by Quinn Emanuel upon filing the suit makes extensive reference to APRA’s claims against IOOF, including the crucial issue of breaches of director duties relating to the Questor and IOOF Investment Management subsidiaries.