Question 1
Lofty Ltd is an online retailer which is listed on the ASX. The company has recently suffered a cyber attack.
Discuss whether a Lofty Ltd is required to disclose data breaches to the ASX under the continuous disclosure provisions.
Question 2
a) Kit is a very ingenuous guy. He started working Smith and Bradbury as a broker after finishing college at 21 and at age 30 is hoping for promotion to partner. He is pretty crafty in his dealing but says he stays strictly within the bounds of the law. Kit knows he needs a big windfall for the promotion, so the plan is to flood the market with shares, anticipating that once he does, other brokers seeing the price falling will do the same. Once the price falls, he will buy back a huge number of shares. Technically he will buying back some of his own shares but mostly shares that others have put on the market.
Kit has come to you seeking advice and would like to know how legal this sort of conduct would be.
b) Kit would also like to know what would happen if he sold his shares now while the price was high knowing that once he floods the market he will be able to acquire the shares he needs to fulfil those contracts at a much lower price.
Advise Kit of the legalities.
Question 3
Anna works for the Australian Government in a department dealing with statistics and forecasts. Her boyfriend Pete is an executive at N & P Bank. Anna, in the course of her work has access to some sensitive information that has not been released to the public . Anna provides this information to Pete who then uses that information to conduct transactions on the foreign exchange market, generating a healthy little profit for himself.
Advise on the legalities of Pete and Anne's actions.
Question 4
Discuss and explain citing appropriate authorities the disclosure requirements in the following:
- Sophisticated investors
- Small scale offerings
- Existing Security Holders
- Sales amounting to indirect issue
Question 5
Annamoon is looking to acquire shares in PTG Ltd. PTG is a mining exploration company. The prospectus Annamoon has received contains the following information:
- The company would invest money in drilling technology work but only on the recommendation of the investment team.
- The prospectus contained a forecast for the upcoming 12 months. Included in the prospectus was a report from PHH and independent accounting firm that indicated that nothing in the forecast has come to their attention which led them to believe the forecast were not reasonable.
- Annamoon also claims that the words in the prospectus are ambiguous and unclear and that the language used is unnecessarily convoluted and complex.
- When Annamoon's brother looks over the prospectus he points out that it does not cover things like dividend policies and executive remuneration.
As it turns out the forecast was not accurate and the company actually significantly underperformed. It also turns out that the company has made investments in drilling technology without consulting the investment team.
Advise.