ASIC wins appeal as Federal Court upholds $11 million in iSignthis penalties

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ASIC wins iSignthis appeal

Highlights

Full Federal Court upholds $10 million penalty against iSignthis for disclosure breaches and maintains six-year disqualification plus $1 million penalty for Karantzis.
Appeal succeeds only in amending one declaration's wording, with all substantive liability and penalty orders remaining unaffected.
Court confirms market integrity harm extends beyond direct financial loss, reinforcing regulatory accountability for listed companies and directors.

Appeal ruling keeps core sanctions intact

As reported by ASIC, the Full Federal Court yesterday largely dismissed the appeals brought by iSignthis and Karantzis against earlier liability, penalty and disqualification orders made by Justice McEvoy.

The court upholds the order requiring iSignthis to pay a $10 million penalty for breaching disclosure laws. It also keeps in place the order disqualifying Karantzis from managing corporations for six years and requiring him to pay a $1 million penalty.

The Full Court allows the appeal only on a limited aspect concerning the wording of one declaration made against Karantzis in the liability judgment, ordering that declaration to be amended. Justices Stewart, Cheeseman and Neskovcin say the issue could have been raised before the primary judge and that correcting it does not change any substantive liability or penalty outcome.

Market integrity message for listed companies

In backing the multimillion-dollar penalty, the Full Court says the relevant harm includes damage to the integrity and proper operation of the market and is not limited to demonstrated financial loss suffered by an identified shareholder.

ASIC Chair Sarah Court says investors are entitled to trust what listed companies tell the market and that accurate, timely disclosure goes to the heart of market integrity. She says failures in that duty can weaken investors' ability to make informed decisions and erode confidence in Australian markets, adding that the ruling reinforces that companies and directors will be held to account when they do not meet those obligations.

The Full Court also orders iSignthis and Karantzis to pay ASIC's appeal costs.

In our earlier article on a Malaysian Court of Appeal ruling on commission partners’ liability, we covered how the court held that a lawyer designated as a commission partner could be treated as a “partner” under the Partnership Act 1961 and made personally liable for RM920,612.65 owed to a property seller. We also noted that the decision overturned two lower-court findings and may have broader implications for how liability is allocated within law firms and other professional partnerships.

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