Billabong will repay $45 million to investors.
Billabong just received some very bad news. Bad for them, at least: the surfwear giant has to pay $45 million dollars to pissed-off investors.
The whole thing started back in 2011, when over 700 institutional and retail investors gobbled up a bunch of Billabong securities. Very soon after, the value of their investments plummeted–in some cases, as much as 50 percent. Now, while that’s a hard pill to swallow for investors, it’s part and parcel of the game they’re playing. But that only works if the game is being played by the rules.
According to Slater and Gordon, the law firm representing the 730 investors, Billabong “engaged in misleading and deceptive conduct over a series of earnings updates.” The suit said, in a nutshell, that Billabong didn’t hold up its end of the bargain when they failed to continually disclose market information regarding the price of their shares.
Newstart 123, a Melbourne-based company was the main plaintiff in the claim. As the trustee of the Malone Family Superannuation Fund, it invested $30 million dollars that, much to the dismay of Newstart 123, quickly turned into something around $15 million. According to News.com.au, “the fund would have acquired Billabong shares at a lower price, or bought shares ‘in another listed entity instead’ if the surfwear giant had not allegedly misled or deceived shareholders with its earnings forecasts.”
In the coming months, the $45 million settlement will be approved by the Australian Federal Court. And, as is the case with most of these things, it’s stipulated that Billabong will make no admission of liability–which, since they’re shelling out $45 million because the courts deemed them liable, seems a little strange.
