Class action law firm Slater and Gordon has welcomed proposed changes to corporate disclosure rules, foreshadowed by the Australian Securities Exchange in a draft guidance note published this week.
Slater and Gordon is Australia's leading plaintiff law and class action law firm and has successfully run numerous class actions on behalf of investors who had lost money due to corporate breaches of continuous disclosure rules.
Toby Borgeest, principal lawyer in Slater and Gordon's commercial and projects litigation practice, said that the proposed changes would help listed companies focus on disclosure of information that really matters to investors.
"We know that many boards and company officers struggle with disclosure issues. It consumes a lot of time, and many companies worry about getting it right," Mr Borgeest said.
"What really matters to investors is that the market receives, in a timely way, significant price-sensitive information. When companies get that badly wrong, they face the prospect of action from regulators and litigation by shareholders. Litigation in this space serves as a barometer on standards of good corporate governance and will continue to play a role in improving corporate governance.
"The ASX has proposed some changes to the disclosure rules, and those changes look sensible and helpful. The disclosure standards are necessarily broad, but these new changes mean that some of the grey area is removed. Directors can now focus on material issues that require disclosure: they have more guidance as to what information is "material", and they get more time and space, through greater use of trading halts, to get their disclosures right.
"These changes should mean that Boards can deal with disclosure matters more efficiently and confidently. It also means that there will be fewer excuses for serious disclosure failures, and Boards should expect that the market, its regulators and investors will continue to expect high standards."
Slater and Gordon is presently conducting numerous shareholder class actions against companies including Sigma Pharmaceuticals Ltd, GPT and Nufarm.
Earlier this year, Slater and Gordon settled claims against the Centro group, and its auditors PricewaterhouseCoopers, in Australia's largest ever class action case.