The Financial Markets Authority has emerged victorious in a legal battle with ANZ Bank relating to the FMA’s ability to share information about the Ponzi scheme run by Ross Asset Management with that company’s liquidators.

ANZ was RAM’s banker and the FMA had obtained information from it using section 25 of the Financial Markets Authority Act that gives it statutory powers to demand such information from anybody.

“The FMA, in the course of its investigation, formed the view that ANZ may be liable to RAM investors in knowing receipt and dishonest assistance,” the Supreme Court says in its judgment.

The FMA was seeking to provide RAM’s liquidators with sufficient information to evaluate the merits of a claim against ANZ.

While the existence of this dispute has been public since late 2017, prompting much speculation, it is only the Supreme Court’s ruling that has revealed that RAM was at the heart of the matter.

“Now that the restrictions on confidentiality over all these matters has been lifted, the FMA will be able to engage with the liquidation committee of Ross Asset Management as a proxy for RAM investors and the liquidators of RAM on the substantive matters at the heart of this case,” the FMA said after the judgment was delivered.

ANZ had won in the High Court but then lost in the Court of Appeal.

Supreme Court Justices Bill Young, Susan Glazebrook and Mark O’Regan dismissed ANZ’s application for leave to appeal because “nothing raised by the applicant raises sufficient doubt that the decision on these particular facts is erroneous and therefore there is nothing that suggests any risk of a miscarriage of justice.”

Nor did they believe the application raised any confidentiality concerns that had not already been addressed by the Court of Appeal. That court had rejected ANZ’s bid for “extensive redactions” to that judgment, but made some pending the outcome of the appeal. 

Justice Sally Fitzgerald of the High Court had decided that the proposed disclosure was outside the powers of the FMA and that the FMA lacked legitimate reasons for the disclosure, whereas the Court of Appeal ruled there was “a good deal of evidence” indicating that the FMA had a genuine purpose in seeking the information.

Justice Fitzgerald had held the view that the FMA was a public body and that its section 25 powers were given for public purposes and not to further purely private interests, such as the interests of the RAM investors.

But the Court of Appeal decided that the FMA Act contemplates working with investor groups in exercising its duties under section 34 of the Act, which allows the FMA to represent investors if that is in the public interest.

The Supreme Court ordered ANZ to pay the FMA $3,500 in costs.

Leave a comment