Australian wealth manager IOOF Holdings has been sued by shareholders who claim the firm allegedly breached stock market disclosure obligations and “engaged in misleading or deceptive conduct.”
The suit was filed in the New South Wales Supreme Court in Sydney by law firm Quinn Emanuel Urquhart & Sullivan.
Quinn Emanuel’s claim against IOOF stems from evidence given by the wealth manager at the Royal Commission into Misconduct in the Banking, Superannuation and Financial Services Industry. The law firm said the evidence concerned breaches by IOOF’s directors and officers, and its subsidiaries, of their obligations as superannuation trustees.
According to the law firm, IOOF shares lost over 35% of their value “following these revelations at the Royal Commission, and the announcement of various proceedings against IOOF’s subsidiaries and officers related to those breaches by the Australian Prudential Regulation Authority (APRA).”
In response to the lawsuit, IOOF said the claim against it was “speculative and without foundation.” The wealth manager also said it “takes its continuous disclosure obligations seriously,” and that it “does not engage in misleading or deceptive conduct.”
In December, the APRA announced a series of actions it was undertaking against IOOF entities, directors, and executives for “failing to act in the best interests of superannuation members.”
APRA Deputy Chair Helen Rowell said the regulator had tried to resolve conflict of interest concerns with IOOF over several years but decided it was necessary to take stronger action after concluding the company was not making adequate progress, nor was it likely to do so in a reasonable period of time.
“APRA’s efforts to resolve its concerns with IOOF have been frustrated by a disappointing level of acceptance and responsiveness to the issues raised by APRA,” Rowell said in a statement. “The actions we are now taking are aimed at achieving enduring change to ensure that the trustees of the superannuation funds operated by IOOF fully meet their obligation to put the interests of members ahead of all other interests.”