Login
Class action against Insignia Financial to commence
A trial investigating alleged misconduct by Insignia Financial Limited (IFL) is slated to begin today (5 June) and is expected to run for up to five weeks.
Rhea Nath
Editors note: This article originally appeared on Lawyers Weekly’s sister brand, Money Management.
This included insider trading; front-running; failure to manage conflicts of interest; issues with the company’s systems, data integrity, and cyber security; and whether the company’s “roll-up business model was materially compromised.
According to Shine Lawyers, which represents hundreds of investors in the case, the company failed to disclose the alleged corporate misconduct and issues with its “roll-up” business model between 1 March 2014 and 7 July 2015.
With the class action, the firm seeks to recover losses suffered as a result of alleged non-disclosures and potential misconduct affecting purchases of IFL shares.
On 8 May 2023, Shine Lawyers participated in a court-ordered mediation with Insignia Financial and its representatives. However, as a settlement was not reached between the parties, the class action would proceed to trial.
“This financial service provider was trusted by investors to advise its clients and manage the funds they had placed with the company responsibly and ethically,” said Shine Lawyers’ joint head of class actions, Craig Allsopp.
“We claim that the misconduct alleged in this case seriously undermined that trust and damaged the company’s reputation.”
He thought it “unsurprising” that the company had since abandoned its IOOF branding.
“We will continue to fight this case to keep corporations honest. They owe transparency to shareholders, and that’s what we’ll argue in court on Monday,” Mr Allsopp said.
Previous several shareholder and financial services class actions by Mr Allsopp and his team would include claims against major corporations like AMP Insurance and CBA CommInsure.
Insignia Financial told Money Management it would vigorously defend the claim in court.
This case relates to events that are alleged to have occurred more than seven years ago and, in some cases, nearly 15 years ago.
“Insignia Financial will vigorously defend the claim and is looking forward to having the matter heard and determined,” a spokesperson said.
The firm declined any further comment on the legal matter that was currently before the court.
According to Stephen Conrad, chief executive of Litigation Lending Services (LLS), which is funding the class action, the case was “yet another example of a failure of governance for a company that had a front row seat at the Hayne royal commission”.
The trial is expected to conclude by Friday, 7 July 2023.
