Financial Recovery Technologies Fast Five provides you with the top news in shareholder class actions. Stay up-to-date on the latest developments in settled (U.S./Canada) claims filing opportunities, Antitrust settlements, Global Group Litigation matters and more. For more information, contact your Financial Recovery Technologies representative or email us.

1. Thirteen Sued for £178m Over Alleged Fraud at London Capital & Finance

Thirteen people including a former UK energy minister are being sued for £178m in connection with an alleged fraud at London Capital & Finance, where investors’ cash is said to have been used to buy horses, a helicopter and lifetime memberships to Annabel’s, the Mayfair private members’ club. Click here to read the full article.

2. Australia: Bondholders Launch Class Action Against PwC

The country’s largest blue-chip company auditor, PwC, is facing a class action from bondholders of its collapsed audit client Axsesstoday over allegations of shoddy accounting work by the big four consultancy. The action, filed in the Federal Court last month, is the seventh time in the past decade that the firm has been sued over its work on audit clients that later collapsed. It has so far settled four of these. Listed lending company Axsesstoday went into voluntary administration in April 2019 after breaching its loan term conditions and was later sold to an affiliate of private investment firm Cerberus Capital Management for almost $260 million. But a prospectus given to bondholders in June 2018 suggested Axsesstoday was not at risk of breaching any loan or debt obligations, and those investors now want compensation. Click here to read the full article (subscription may be needed).

3. AMP Contract Prevents Planners From Joining Class Action

AMP financial planners have been asked to sign a contract that would force them to compensate the troubled wealth giant for any damages related to class actions should they sell their business. These contracts have only been issued to a small number of planners who have been offered exit terms that go “above and beyond” what is legally required, according to AMP Financial Planners Association chief executive Neil Macdonald. However, Mr Macdonald said the deed of release terms would prohibit planners from participating in the class action launched by current and former aligned advisers in July and could leave them in a worse off position in case the lawsuit is successful. Click here to read the full article.

4. German Criminal Liability Proposal Would Affect US Cos.

In June, Germany’s Federal Ministry of Justice and Consumer Protection published a bill whose principal part is the Law for Sanctioning Company-Related Offenses. Once passed, this bill will create corporate criminal liability, and a vote is expected soon, as the final debate before Parliament’s plenary session is scheduled for Sept. 18. Three features of the law stand out for multinational businesses and practitioners: 1) in contrast to current law, this bill dramatically increases potential corporate penalties; 2) the law imposes a duty to prosecute potentially criminal conduct, removing any prosecutorial discretion; and 3) the draft bill provides for cooperation credit for internal investigations, but they must be undertaken in conformity with German conceptions of due process. Click here to read the full article (subscription may be needed).

5. South African Courts Confirm That the Companies Act Preserves the Principle of Reflective Loss

In a case where a company is harmed by the actions of a third party and the company’s share price consequently depreciates, a shareholder in the company is ordinarily not entitled to bring proceedings to recover his or her losses from the relevant third party. This is referred to as the principle of reflective loss, because the shareholder’s loss is said to be a mere reflection of the loss suffered by a company, rather than the personal loss of the shareholder. There has, until two recent decisions, been some uncertainty as to whether, contrary to the principle of reflective loss, the Companies Act, 2008 (the “Act”) permits a shareholder to claim from a third party for loss sustained as a result of the diminution of a company’s share price. In Hlumisa Investment Holdings (RF) Ltd and Another v Kirkinis and Others and in De Bruyn v Steinhoff International Holdings N.V. and Others, the courts concluded that the Act does not permit a deviation from the principle of reflective loss. Click here to read the full article.

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