The Federal Court of Australia is set to slap defence contractor Electro Optic Systems (ASX:EOS) with a $4 million penalty following a breach of its continuous disclosure obligations.
During a hearing on April 2, Justice Ian Jackman indicated his intention to formalise the fine—a figure jointly proposed by EOS and the Australian Securities and Investments Commission in November 2025.
The penalty stems from a 14-week silence in 2022, during which the company failed to alert the market to a substantial revenue downgrade.
The court heard that while EOS initially projected 2022 revenues of $212.3 million, internal data by July 25, 2022, suggested a collapse to approximately $164 million. Despite this material shift, a market update was not issued until Oct. 31, 2022.
ASIC argued that this delay deprived investors of timely financial information, further noting that the company’s transparency has remained under scrutiny.
As recently as March, EOS was forced to overhaul its disclosure policies after the ASX flagged that a December 2025 high-energy laser contract announcement lacked adequate detail on market-sensitive terms.
"I indicate that I’m prepared to make orders as sought by the parties," Justice Jackman told the court, confirming he would publish his full reasons next week.
At the time of reporting, Electro Optic Systems’ share price was $9.57.