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13/08/2025·2 min read
ASIC secures multi-million dollar penalty against iSignthis for breach of market disclosure laws
The Australian Federal Court has ordered payments business iSignthis Limited (iSignthis) (now Southern Cross Payments Limited) to pay a A$10 million penalty for breaching continuous disclosure laws and misleading the market.
Its former managing director and chief executive officer, Nicolas Karantzis, was also disqualified from managing corporations for six years and penalised A$1 million for breaching his director’s duties and for his role as an accessory to iSignthis’ contraventions.
Key takeaways
- The Australian Securities and Investments Commission (ASIC) and the New Zealand Financial Markets Authority (FMA) continue to actively monitor and take enforcement action against market misconduct, particularly where it results in harm to investors.
- Penalties for market misconduct can be significant and are on the rise in both Australia and New Zealand.
- Liability for market misconduct is not restricted to listed companies or regulated entities. Individuals who are accessories to a company’s breach or otherwise breach their individual duties can also be personally liable.
iSignthis and Nicolas Karantzis
iSignthis was a payments, electronic money, and identity technology company. It was listed on the ASX and the Frankfurt Stock Exchange.
In June 2024, the Federal Court found iSignthis had repeatedly breached its continuous disclosure obligations by overstating its recurring (as opposed to one-off) revenue and failing to disclose the termination of a key customer contract. iSignthis was also found to have misled the market as to its financial position in an analyst briefing, which subsequently inflated iSignthis’ share price.
The Court agreed with ASIC that Mr Karantzis was personally liable for failing to discharge his duties as a director with due care and diligence, gave false and misleading information to the market and was involved as an accessory in iSignthis’ continuous disclosure contraventions (being its “guiding mind”).
In its subsequent penalty decision, the Federal Court rejected the defendants’ arguments that a pecuniary penalty of A$350,00 for iSignthis and A$250,000 and no banning order for Mr Karantzis was appropriate. The Court held iSignthis and Mr Karantzis were guilty of serious contraventions that were deliberate, knowing and continued for lengthy periods. The penalties suggested by the defendants were “little more than derisory” and “manifestly insufficient to achieve a deterrent effect”. The Court therefore imposed pecuniary penalties of A$10 million on iSignthis and A$1 million on Mr Karantzis with Mr Karantzis also being disqualified from managing corporations for six years.
Continuous disclosure in New Zealand
The Federal Court’s penalty decision follows the recent conclusion in New Zealand of the FMA’s continuous disclosure enforcement action against former NZX-listed insurance company CBL Corporation Limited, its directors and chief financial officer for multiple breaches over an extended period, which saw the High Court make pecuniary penalty orders totalling NZ$11.92 million.
The FMA’s 2025-2026 Financial Conduct Report also confirms continuous disclosure remains an enforcement priority for the regulator, particularly in the current challenging economic conditions and where “New Zealand’s capital markets have been impacted by the increased global market volatility driven by geopolitical tensions and economic uncertainties”. The FMA has warned listed issuers to “confront material uncertainties in their financial statements and forward-looking information”. This includes ensuring they “provide appropriate tone, context, and caveat statements, particularly where the information includes uncertainties”.
Get in touch
If you have any questions about your company’s compliance with the New Zealand’s financial markets laws or potential personal liability for directors and senior officers, please get in touch with one of our contacts.
