Shares in IOOF rose 2.54 per cent to $4.44 on Monday in the wake of the settlement in the wealth manager’s favour.
Quinn Emanuel partner Damian Scattini confirmed its proceedings against IOOF had been discontinued, blaming APRA’s failed attempt at pinning directors’ duty breaches on the company and having a number of its executives disqualified from the financial services industry.
“The APRA proceeding was conducted in a surprising manner and it resulted in an unexpected outcome,” Mr Scattini told The Australian Financial Review.
“Given the APRA decision, our client determined that it was no longer in the interests of group members to continue.”
The Federal Court of Australia in October 2019 threw out APRA’s lawsuit against IOOF, describing the regulator’s case as “unpersuasive” and ordering it to pay costs. APRA did not appeal the decision.
‘Small overlap’
However, Mr Scattini, a prominent plaintiff lawyer and former Maurice Blackburn partner, left the door open to further to litigation emerging out of the ashes of the collapsed suit.
“The settlement specifically allows any shareholder or former shareholder who wishes to do so to file a claim, whether individually or as a class.”
While the Quinn Emanuel action has been settled, a separate class action brought by local firm Shine Lawyers will go ahead, with a case management hearing scheduled in the courts this Thursday.
Shine class actions practice leader Craig Allsop said he would not be deterred by Quinn Emanuel’s withdrawal.
“Despite there being a small overlap, in terms of the claim period, between the class action Shine Lawyers has commenced against IOOF and the class action Quinn Emanuel has discontinued, the nature of each claim is actually very different,” Mr Allsopp said.
“To our knowledge, Quinn Emanuel’s claim focussed on undisclosed regulatory risk …by contrast, the claim brought by Shine Lawyers is one of undisclosed business model risk, namely that IOOF failed to disclose that its business model was compromised in numerous material respect.”
IOOF has restructured its superannuation trustee operations to ensure independence from the company’s board since directors’ duty breaches were alleged by APRA and the Hayne inquiry.
