The Federal Court has today ordered Australia and New Zealand Banking Group Limited (ANZ) to pay a penalty of $900,000 for breaching its continuous disclosure obligation during a $2.5 billion institutional share placement in 2015.

The Court declared that ANZ contravened section 674(2) of the Corporations Act by failing to notify the Australian Securities Exchange (ASX) that ANZ shares, with a value of between approximately $754 million and $790 million of the $2.5 billion of ANZ shares offered in an Institutional Placement, were to be acquired by its underwriters.

ASIC Deputy Chair Karen Chester said, ‘This is a landmark case for ASIC. Today’s decision confirms the paramount importance of continuous disclosure. The penalty and remarks from the Judge today are a clear and resolute message to ANZ and the market that this conduct was very serious. It also confirms that a significant take-up of shares by underwriters (in a share placement) must be disclosed to the market and investors.

‘If such a contravention occurred today, the maximum penalty could be anywhere between $15 million to $780 million. Listed entities should see today’s penalty decision as a strong and purposeful warning to fully meet their continuous disclosure obligations.

‘ASIC will continue to enforce the continuous disclosure regime to ensure investors are provided material information to make informed investment decisions. Continuous disclosure is key to maintaining market integrity,’ concluded Ms Chester.

When delivering his reasons, Justice Moshinsky stated that the contravention is very serious, and a large penalty is required to achieve deterrence.

ANZ was also ordered to pay ASIC’s costs of and incidental to the proceedings.