Aussie lender ANZ loses case over troubled 2015 share placement worth $1.6 billion

(Reuters) -Australia's ANZ Group on Friday lost a landmark lawsuit that found it guilty of not disclosing to public that its underwriters had bought nearly one-third of a share issue worth A$2.5 billion ($1.58 billion) in 2015.

The country's Federal Court found the third-largest lender guilty of breaking disclosure laws by failing to notify the market that between A$754 million and A$791 million of the shares were acquired by its underwriters instead of being placed with investors.

The Australian Securities and Investments Commission (ASIC) in September 2018 sued ANZ over the issue, while the competition regulator in June 2018 filed criminal cartel charges against the lender and its two investment banks, Citigroup Inc and Deutsche Bank AG.

The Australian Competition and Consumer Commission, however, withdrew the lawsuit in February 2022, citing there was "no longer reasonable prospects of conviction", marking a stunning retreat from potentially one of the biggest white-collar criminal trials in the country.

"The landmark case reaffirms the importance of the continuous disclosure rules to maintain market integrity," the ASIC said in a statement on Friday.

"The decision also confirms that a significant take-up of shares by underwriters in a capital raising may be considered price sensitive information requiring market disclosure."

The maximum penalty under the court decision is A$1 million, ANZ said.

However, the ASIC added that the maximum fine had increased in 2019 to the greatest of 50,000 penalty units, implying A$15.65 million, or three times the benefit obtained, or 10% of annual turnover.

The bank is reviewing the court judgement, it said, while the securities regulator said it would now make submissions on appropriate penalties.

($1 = 1.5838 Australian dollars)

(Reporting by Sameer Manekar in Bengaluru; Editing by Rashmi Aich)