SYDNEY (Reuters) – Australia’s embattled second-largest wealth manager, IOOF Holdings Ltd, was sued on Friday by shareholders who alleged the corporate engaged in misleading conduct and breached inventory market disclosure obligations.
The class-action lawsuit is the ninth towards a serious monetary agency since a public inquiry final yr uncovered widespread misconduct in Australia’s monetary system, together with charging clients charges for no service and deception of regulators.
The go well with was filed within the New South Wales Supreme Court in Sydney by regulation agency Quinn Emmanuel.
In a press release, the agency alleged administration impropriety drew regulatory consideration which hit the share worth. It didn’t say what shareholders are asking for as compensation.
IOOF stated in response it doesn’t interact in deceptive or misleading conduct, the case is with out basis and it’ll mount a protection.
The wealth manager is contesting a transfer in December by the Australian Prudential Regulation Authority (APRA) to disqualify 5 prime IOOF executives for failing to behave in clients’ pursuits.
APRA stated it had recognized three events when models of IOOF had used cash belonging to pension fund clients to compensate them for losses brought on by the corporate.
IOOF stated in December that the allegations have been misconceived and that it will vigorously defend towards them. It added that it had already addressed or was addressing APRA’s different considerations.
The regulator’s transfer adopted IOOF’s look on the public inquiry, referred to as a Royal Commission, and knocked 40 % from the agency’s share worth.
The inventory has recouped most of these losses, although one of many executives, Managing Director and CEO Christopher Kelaher, will depart the corporate by “mutual agreement” in July amid a broader overhaul.
“The reckoning that began at the Royal Commission now goes to the next stage, with the filing of this class action,” Quinn Emmanuel companion Damian Scattini stated in a press release.
Reporting by Tom Westbrook; Editing by Muralikumar Anantharaman