The Australian Securities and Exchange Commission said Monday that the Federal Court has ordered iSignthis Ltd, now trading as Southern Cross Payments Ltd, to pay a $10 million penalty for breaching disclosure laws, while its former CEO, Nickolas John Karantzis, has been fined $1 million and banned from managing corporations for six years.
According to a release from the regulator, the court found that between 2018 and 2020, the payments and identity verification firm repeatedly failed to meet its continuous disclosure obligations, provided false or misleading information to the ASX, and misrepresented its revenue composition.
It was delisted from the ASX in November 2022.
Justice McEvoy determined that iSignthis misled investors by understating one-off revenues, failed to disclose millions in one-off revenues and costs for the June 2018 quarter, and withheld information about VISA terminating its relationship in 2020.
Mr Karantzis was found to have breached his director’s duties by failing to ensure the accuracy of disclosures and not exercising reasonable care.
The judge is said to have noted his tendency to minimise or justify the misconduct reinforced the need for both specific and general deterrence.
ASIC Deputy Chair Sarah Court said the outcome reflected “repeated disregard for the law” and the regulator’s commitment to protecting market integrity.
Justice McEvoy added that investors have a right to expect transparency and accuracy, warning against “spin and obfuscation” in market disclosures.
The penalties follow a previous liability judgment against iSignthis and Mr Karantzis earlier this year.