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The major bank has been ordered by the Federal Court to pay a penalty for breaching its continuous disclosure obligation.
ANZ has been ordered by the Federal Court to pay a penalty of $900,000 for breaching its continuous disclosure obligation during a $2.5 billion institutional share placement in 2015.
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According to the Australian Securities and Investments Commission (ASIC), the Court had declared that the major bank had contravened section 674(2) of the Corporations Act by failing to notify the Australian Securities Exchange (ASX) that ANZ shares, with a value of between approximately $754 million and $790 million of the $2.5 billion of ANZ shares offered in an institutional placement, were to be acquired by its underwriters.
ASIC deputy chair Karen Chester said that this was a “landmark case for ASIC”.
“Today’s decision confirms the paramount importance of continuous disclosure,” Ms Chester said.
“The penalty and remarks from the Judge today are a clear and resolute message to ANZ and the market that this conduct was very serious.
“It also confirms that a significant take-up of shares by underwriters (in a share placement) must be disclosed to the market and investors.”
Ms Chester added that had such a contravention occurred in the present, the maximum penalty could be “anywhere between $15 million to $780 million” and that other listed entities should see the decision as a “strong and purposeful warning” to meet continuous disclosure obligations.
“ASIC will continue to enforce the continuous disclosure regime to ensure investors are provided material information to make informed investment decisions,” Ms Chester concluded.
“Continuous disclosure is key to maintaining market integrity.”
The major bank has also been ordered to pay ASIC’s costs of and incidental to the proceedings.
ANZ slammed with $15m fine
Prior to this, the major bank was also ordered to pay a $15 million fine after it admitted to misleading nearly 166,000 customers over the level of funds in their credit card accounts between 2016 and 2021.
ASIC commenced with civil action against ANZ in 2022, with the Federal Court concluding that the bank has breached the ASIC Act and the National Consumer Credit Protection Act by falsely indicating customers could obtain a cash advance from funds stated to be their ‘available funds’ without incurring fees and interest.
The court found ANZ had not cleared deposits into the credit card accounts, which resulted in the ‘available funds’ amount being incorrect and showing a larger balance than what was available for withdrawal without incurring fees or interest.
It said the error resulted in customers who obtained a cash advance based on these available funds being hit with fees and interest.
The court also said ANZ did not act “efficiently, honestly, and fairly” by failing to take timely action to address the problem.
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