Australia’s corporate watchdog is suing the country’s largest exchange operator, ASX Limited, over alleged misleading statements about one of its projects.
The Australian Securities and Investments Commission (ASIC) filed a civil action in the Federal Court on Tuesday.
The statements in question relate to a plan to replace computer systems used to record shareholdings and manage the settlement of share transactions, according to ASIC.
It alleges that statements made in the ASX announcements on 10 February 2022 that the project remained “on track to come online” in April 2023 and was “progressing well” were misleading.
Those representations were misleading and deceptive because, at the time of the announcements, the project was not progressing as planned and ASX had no reasonable basis to imply that it would meet future milestones, according to ASIC.
The plan, known as the CHESS replacement project, was suspended in November 2022.
Chairman Joe Longo said the comments were a “collective failure” of the ASX’s board and senior executives.
“Companies and market participants rely on what the ASX says about their operations to make their own decisions and investments,” he said.
ASIC alleges Australian securities market operator made misleading statements to consumers
Chief executive Helen Lofthouse said the ASX was “reviewing the allegations”
“We expect the ASX to be a place where people can trade and invest with confidence. When the ASX fails to deliver, the consequences are far-reaching for the entire market.”
ASX managing director and chief executive Helen Lofthouse said the organisation had made “great progress” since the comments were made.
“We recognize the importance and seriousness of these procedures,” he said.
“We are fully cooperating with ASIC’s investigation and are now carefully reviewing and considering the allegations.”
ASX is due to release its FY24 results on Friday.
ASIC has yet to determine what penalty it will seek for ASX’s alleged breaches.