The IOOF Holdings Limited (ASX: IFL) share price fell even more than the market on Friday after confirming the receipt of a class action.
The financial services company’s shares ended the day 5% lower at $5.67.
What is the class action?
This afternoon IOOF revealed that it has been served with a class action proceeding filed by Shine Corporate Ltd (ASX: SHJ) in the Federal Court on behalf of investors who acquired an interest in IOOF’s shares between March 1 2014 and July 7 2015.
The class action is seeking to recover losses suffered as a result of alleged non-disclosures and potentially misleading and deceptive conduct.
Shine Lawyers explained: “The non-disclosures and misleading and deceptive conduct relate to alleged corporate misconduct within IOOF disclosed in Fairfax Media articles in June 2015, at Senate hearings in July and August 2015 and at the Financial Services Royal Commission in 2018. Details of the alleged misconduct included insider trading, front running, staff cheating on exams and breaches of trustee duties, occurring in the period 1995 to 2015.”
It believes that by failing to disclose the alleged corporate misconduct within IOOF between March 1 2014 and July 7 2015, the company breached its continuous disclosure obligations and/or engaged in misleading and deceptive conduct.
This afternoon IOOF acknowledged receipt of the class action.
However, it dismissed the claim as appearing to be without merit and advised that it intends to defend the class action in the Federal Court.
The isn’t the first time the company has been taken to court in recent months. At the end of September the Federal Court held that IOOF’s APRA regulated entities and five employees did not contravene the Superannuation Industry Act 1993.
The Court also declined to make the disqualification orders sought against the five individuals, and awarded costs in IOOF’s favour. It will no doubt be hoping for a similar result with this latest court action.
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Motley Fool contributor James Mickleboro 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.