IOOF Holdings Limited (ASX: IFL) is down nearly 2% at the time of writing due to the looming threat of a class action by shareholders, as reported in The Australian newspaper.
The Federal Court ruling said that the company must disclose documents relevant to allegations of misconduct involving an alleged frontrunning scandal, which saw the share price tumble its largest one day fall of 13% in 2015.
The allegations involve the head of research at the time, who was susposedly frontrunning trades in Adelaide Bank, Macquarie and Toll Holdings ahead of releasing research notes to clients.
The previous class action was blocked as the lawyers were said to be in possession of allegedly stolen material. But, the court has ruled that IOOF must now release similar documents that may implicate the company in misconduct by one of its employees.
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Motley Fool contributor Rosemary Steinfort has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.