One of the best performers on the S&P/ASX 200 index on Friday has been the IOOF Holdings Limited (ASX: IFL) share price.
The embattled financial services company's shares surged 8% higher to $5.99 this morning.
Why is the IOOF share price rocketing higher today?
Investors have been buying IOOF's shares this morning after the Federal Court of Australia came to a decision in relation to proceedings brought by APRA against IOOF's APRA regulated entities and five individuals who were responsible persons of those entities at relevant times.
The prudential regulator had been seeking to disqualify its former managing director Chris Kelaher, chairman George Venardos, chief financial officer David Coulter, company secretary Paul Vine, and general counsel Gary Riordan from working in the APRA regulated superannuation industry.
However, this morning the Court held that IOOF's APRA regulated entities and the five individuals did not contravene the Superannuation Industry (Supervision) Act 1993. The Court also declined to make the disqualification orders sought against the five individuals, and awarded costs in IOOF's favour.
IOOF welcomed the decision and advised that it is currently reviewing the written judgment in detail and expects to issue a further announcement in due course.
This decision looks set to be a major positive for a company that has seemingly experienced countless negatives over the last couple of years which have led to its shares losing almost half of their value.
However, the damage that was done to its reputation during the Royal Commission will take time to repair, so I wouldn't recommend investing in its shares just yet.
I think investors ought to wait for signs of sustained improvement in its operating performance before considering an investment. The same applies to fellow embattled financial services company AMP Limited (ASX: AMP), which has seen its share price shed over 60% of its value over the same period.
