Financial services firm IOOF is facing its second shareholder class action after Brisbane-based firm Shine Lawyers secured a litigation funder following allegations of misconduct at the 174-year-old company.
Litigation Lending will bankroll the class action and the law firm is now calling on shareholders to sign up if they were affected by losses in the stock's valuation following allegations of misconduct aired in 2015 by this publication that revealed allegations of insider trading and front running – buying shares ahead of a client to benefit from any price increase from the increased demand.
IOOF faces its second class action.
IOOF, which has a market value of $2.4 billion, sells financial advice, superannuation, investment management and trustee services, and was hauled in front of a Senate hearing following the publication of whistleblower testimony that raised serious issues about IOOF’s culture and governance.
Litigation firm Quinn Emanuel filed proceedings against IOOF in the NSW Supreme Court last year relying partly on allegations that the company and a number of its executives breached superannuation directors' duties, claims brought by the Australian Prudential and Regulation Authority (APRA) and dismissed by the Federal Court in September last year.
Shine Lawyers class action lawyer Craig Allsopp, who previously worked at financial crimes watchdog ASIC, said the lawsuit would focus on share price losses stretching back to 2015 and he was confident it was a "strong claim".
"IOOF has a case to answer. Shareholders have just seen the value of IOOF shares destroyed over and over again. So far no one has been able to obtain any redress to that," Mr Allsopp said.
"We’re going back to the beginning and acting on behalf of shareholders that took the first hit from IOOF’s alleged misconduct."
Mr Allsopp said while the financial services company has allocated $223 million to pay back customers who had been given inappropriate advice, shareholders had been shut out of compensation.
"As with a lot of things around IOOF, there definitely seems to be things not passing the pub test."
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