Yesterday, law firm Maurice Blackburn announced it was preparing to launch a class action lawsuit against IOOF and was inviting shareholders to join the case.
The lawyers said IOOF’s alleged failure to disclose possible misconduct within its firm had led investors to unfairly purchase company shares at “inflated” prices.
However, in a statement, IOOF has said it rejects those claims.
“IOOF has rejected a claim that it breached its continuous disclosure obligations or engaged in misleading or deceptive conduct,” the statement said.
“IOOF is confident that the proposed action described by Maurice Blackburn is misconceived both factually and at law. It would be purely speculative and is not in IOOF shareholders’ interests.
“IOOF complies with the law in relation to its continuous disclosure obligations and rejects any suggestion that its approach is inadequate. In the interests of its shareholders, IOOF will vigorously defend any claim.”
The class action follows allegations of front-running and insider trading within IOOF sparked by Fairfax Media news reports. The media company also reported that IOOF’s senior managers and board were aware of the allegations as they unfolded but did not report them to ASIC.
When the public was finally made aware, IOOF’s shares dropped 13.3 per cent, wiping $450 million off the company’s market capitalisation, according to Maurice Blackburn.
Speaking to ifa, Brooke Dellavedova of Maurice Blackburn Lawyers said because these allegations weren’t reported to the market immediately, it resulted in investors paying too much for their shares.
“These are cases proceeded on the basis – not so much that someone [at IOOF] made a bad decision or did the wrong thing – but that they didn’t tell the market,” she said.
“And therefore the information couldn’t be priced into the price of the security. We would say people who bought shares during the relevant period paid an inflated price for their shares and we’re trying to recover that amount.”
Ms Dellavedova is calling on those who bought IOOF shares between 1 December 2013 and 19 June 2015 to register their interests in participating in the class action at www.mauriceblackburn.com.au/IOOF.
The deadline to register will be February 2016 and it will be free to join.
The law firm’s allegations come despite IOOF reporting in August that an independent review of its breach-reporting process and research team found no “fundamental breakdown”.
