The Australian Securities & Investments Commission has obtained Federal Court penalty orders against iSignthis Ltd, now Southern Cross Payments Ltd, and its former managing director and chief executive officer Nickolas John Karantzis for disclosure-related contraventions. The Court ordered the company to pay an AUD 10 million penalty for breaching disclosure laws, and disqualified Karantzis from managing corporations for six years and imposed an AUD 1 million penalty for breaching his directors’ duties and failing to ensure information provided to the Australian Securities Exchange (ASX) was not false or misleading. The orders follow earlier findings by Justice McEvoy that the company engaged in misleading or deceptive conduct on 3 August 2018 by representing that less than 15% of fourth-quarter revenue to 30 June 2018 was from one-off or set-up fees, and failed from that date to disclose it had recognised approximately AUD 3 million in one-off and non-recurring revenue and incurred approximately AUD 2.85 million in one-off costs. The Court also found iSignthis failed from 12 May 2020 to disclose that Visa had terminated its relationship with the company and Visa’s reasons for doing so, and found Karantzis failed to exercise reasonable care and diligence, was involved in the company’s continuous disclosure failures, and did not take reasonable steps to ensure ASX information about the Visa termination was not false or misleading.

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