The conclusions from the Royal Commission into the banking and finance sector has caused the lawsuit, where Quinn Emmanuel alleged that IOOF breached its duties.
It alleges that IOOF’s conduct breached its continuous disclosure obligations under the Corporations Act, and engaged in misleading or deceptive conduct, which resulted in shareholder paying an inflated price for shares in the financial services business.
“Management at IOOF must have known that its conduct was risky legally and reputationally,” said Quinn Emanuel partner Damian Scattini. “Yet they persisted, and the board let it pass.
“The reckoning that began at the Royal Commission now goes to the next stage, with the filling of this class action.”
In December 2018, following the uncovering of evidence against IOOF during the royal commission, the Australian Prudential Regulation Authority (APRA) launched legal proceedings against company directors to disqualify those directors from acting as superannuation trustees.
The firm is not the first Australian business to suffer from a class action lawsuit – AMP was served with two class action proceedings in 2018.