ANZ fails to overturn ruling on $2.5B capital raising breach

ANZ (ASX:ANZ) has lost its bid to overturn a Federal Court ruling that found the bank violated disclosure laws during a turbulent $2.5 billion capital raising nearly a decade ago.
 
The decision, upheld by the court, marks the conclusion of a long-running legal battle with the Australian Securities and Investments Commission.
 
Last year, Justice Mark Moshinsky ruled that ANZ breached the rules in 2015 by failing to disclose a significant shortfall in its institutional capital raising to retail investors.
 
The bank had enlisted Citi, JP Morgan, and Deutsche Bank to underwrite the deal but fell short of its target.
 
ANZ then proceeded to raise $500 million from retail investors, a move the court argued could have been impacted if they had been aware of the institutional shortfall.
 
ANZ, which received a $900,000 fine for the breach, appealed the decision, arguing that the shortfall would not have affected its overall value or caused a "disorderly" market that could impact the share price.
 
The bank contended that the shortfall would not materially influence key financial metrics such as cash flows and earnings.
 
The 2015 capital raising, overseen by then-CFO and current CEO Shayne Elliott, also prompted a cartel case by the competition regulator against ANZ, Citi, and Deutsche Bank, along with their key executives.
 
However, that case was ultimately dismissed.
 
At the time of reporting, ANZ's share price was $30.20.