Court stops IOOF shareholder class action

Plaintiff law firm Maurice Blackburn last year announced it was preparing to launch a class action against IOOF for allegedly failing to disclose possible misconduct within its firm that led investors to purchase company shares at “inflated” prices.

The Victorian Supreme Court has made orders by consent restraining Maurice Blackburn from instituting or prosecuting its lawsuit.

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Maurice Blackburn will be restrained from assisting any other person to carry out the class action, or to disclose confidential IOOF documents to any person.

IOOF sued the plaintiff law firm in February 2016 seeking the return of confidential documents handed to Maurice Blackburn by four former employees.

Maurice Blackburn proposed in October 2015 that shareholders of IOOF participate in a class action against the financial services firm following a 13.3 per cent drop in IOOF’s share price on 20 June 2015.

The fall in IOOF’s share price followed the publication of allegations of insider trading and ‘front running’ by IOOF.

As part of the Supreme Court orders made on 19 October 2016, Maurice Blackburn’s litigation funder Harbour Litigation Funding Limited will be restrained from providing funding or other support for any other legal work in relation to the proposed class action.

Commenting on the court orders, IOOF managing director Christopher Kelaher said the decision “confirms IOOF’s position”.

“We have always maintained that the proposed class action was misconceived both factually and at law,” Mr Kelaher said.

Maurice Blackburn principal Jacob Varghese said the case highlighted the “extreme inadequacy” of Australian law to deal appropriately with whistle-blower information.

“The fact that IOOF sued Maurice Blackburn and no one else shows that this case was motivated for the sole purpose of stopping our firm from holding IOOF to account on behalf of shareholders,” Mr Varghese said.

“We still firmly believe IOOF did the wrong thing and should be held to account and that the reason it fought so hard was to avoid the scrutiny a class action would bring.”