Forrest v ASIC : a ‘perfect storm’

The policy objectives of the continuous disclosure regime augmented by the misleading or deceptive conduct provisions in the Corporations Act are to enhance the integrity and efficiency of Australian capital markets by ensuring equality of opportunity for all investors through public access to accurate and material company information to enable them to make well-informed investment decisions. This article argues that there were failures by the regulators in the performance of their roles to protect the interests of investors in Forrest v ASIC; FMG v ASIC (2012) 247 CLR 486: ASX failed to enforce timely compliance with the continuous disclosure regime and ensure that the market was properly informed by seeking immediate clarification from FMG as to the agreed fixed price and/or seeking production of a copy of the CREC agreement; and ASIC failed to succeed in the High Court because of the way it pleaded its case. The article also examines the reasoning of the High Court in Forrest v ASIC and whether it might have changed previous understandings of the Campomar test for determining whether representations directed to the public generally are misleading.