Representing the group members and appearing on behalf of Shine Lawyers, barrister Michael Hodge led the argument that IOOF had engaged in contravening conduct and neglected its obligations by failing to disclose allegations of misconduct.

These allegations were aired in explosive 2015 media reports, which uncovered a 2009 investigation into IOOF’s head of research, Peter Hilton, who allegedly made “suspicious trades” and was involved in front running at the same time his research reports were released.

The media articles alleged Mr Hilton had received a “final warning” in 2014, around the same time a research report highlighted misrepresentation of the outperformance number of funds.

Following the first of the articles on Saturday, 20 June 2015, share prices fell by 13.32 per cent the following Monday.

After IOOF managing director Chris Kelaher faced the Australian Senate economics committee in early July 2015 — where he admitted the company “did not report serious allegations of misconduct” to the corporate regulator — the share prices fell a further 3.27 per cent.

As part of the argument against IOOF, investors have claimed they “forewent other investment opportunities that would have proven successful and for which shareholders should be compensated”.

In his closing submissions, Mr Hodge said IOOF made admissions of misconduct within the company before and after it released its own media statement about a 2014 PwC investigation.

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In the release, Mr Hodge said the company announced it would accept the recommendations and did so, which he claimed to the court amounted to “admissions before and after the media release”.

“It doesn’t take Your Honour anywhere to say IOOF publicly said it would adopt all the recommendations but didn’t publicly accept all the findings that were made at the time by PwC,” Mr Hodge said.

On behalf of Insignia, barrister Nicholas Owens said group members asked the court to consider a “smorgasbord of incidents” that reflected poorly on the company and is then relevant to reputation.

He accused the applicants of piling together earlier incidents, such as the 2009 investigation with the 2014 reports, to prove the case.

“By looking at it in its actual timespan, to the extent to which the applicant is trying to identify some systemic problems, one has a much bigger appreciation that you can’t just pluck things randomly from different decades,” Mr Owens said.

This follows on from Mr Owens’ argument that media reporting was “sensationalist” and claimed that without that language, Insignia’s investors would not have been discouraged.

Mr Owens added the applicant failed to identify the case with precision and made submissions with “a very high level of generality”.

“It’s not enough to simply say something bad happened, therefore it affects reputation, therefore it is immaterial. Why would someone in March 2014 say this is something that would persuade investors in this company to reassess future cash flows?” Mr Owens said.

“We say this is one where the case will fail for want of proof.”

Mr Hodge disputed this, telling the court the build-up was relevant.

“If you have an isolated incident that occurs somewhere in the bowels of the company, that is not something that will have an effect on value. Once those things build up … into the issues identified by PwC, then it would have an effect,” Mr Hodge said.

Justice Stewart Anderson thanked the parties for their submission and said he planned to come to a decision by the end of the year.