IOOF faces second class action

IOOF Holdings Ltd is facing a second class action from shareholders who want to recover losses from alleged non-disclosures and potentially misleading and deceptive conduct affecting IOOF share purchases from March 1, 2014, to July 7, 2015, inclusive.

Shine Lawyers launched the class action on behalf of the shareholders after LS Fund Services, a part of Litigation Lending Services Ltd (LLS), confirmed conditional funding, subject to sufficient shareholder interest.

In June 2019, Quinn Emmanuel started a class action against IOOF on behalf of shareholders, backed by the Regency Group, which arose from evidence given by IOOF executives at the 2018 financial services royal commission. The law firm alleges breaches by IOOF’s subsidiaries, and directors and officers, of their obligations as super trustees.

In 2016, Maurice Blackburn dropped a class action on behalf of shareholders against IOOF over revelations by FairFax Media (now Nine) of a whistleblower’s disclosure of IOOF’s alleged corporate misconduct, leading a collapse of IOOF shares in June 2015. The class action was dismissed as part of MB’s “walk-away” deal with IOOF after it took action in the Vic Supreme Court against MB in confidentiality dispute over the whistleblower’s disclosures.

Shine Lawyers’ class action alleges IOOF’s non-disclosures and misleading and deceptive conduct related to its corporate misconduct disclosed in the Fairfax Media June 2015 articles; at Senate hearings in July and August 2015; and the financial services royal commission (FSRC) in 2018.

The alleged misconduct included insider trading, front running, staff cheating on exams and breaches of trustee duties, occurring from 1995 to 2015.

The litigations are proceeding despite APRA’s unsuccessful action against IOOF for failing to act in the best interests of super members as revealed at the FSRC.

Shine Lawyers claims as of mid-February, IOOF shares were trading at $7.05 – 34% below the price immediately before Sydney Morning Herald articles, published on June 20, 2015, made several allegations of IOOF’s misconduct.

The law firm claims IOOF share price dropped 20% after the SMH articles; and another 0.3% after CEO Chris Kelaher admitted in Senate hearings IOOF had failed to report to ASIC serious past allegations of insider trading and front running by IOOF’s senior staff.

Shine Lawyers further alleges IOOS shares dropped 6% more in value after Kelaher and other IOOF executives revealed before the FSRC that IOOF’s Questor subsidiary had allegedly disadvantaged super fund members over private investors.