Managed investments company Huntley Management was handed the steep penalty by the Federal Court of Australia after being found guilty of making false and misleading statements between September 2010 and October 2015.
The company made statements on its website and into two advertisements in a national newspaper that its investment projects were “approved by the Australian Securities and Investments Commission”.
The case hinged on the word ‘approved’ and its connotations likely to conveyed to consumers.
“Huntley’s projects had not been approved by ASIC. It was true that the schemes were registered with ASIC but … I do not think that this is remotely what the word ‘approved’ conveys,” said Justice Nye Perram in handing down his verdict.
ASIC launched court proceedings against Huntley Management after it did pay two infringement notices totalling $20,400 that were issued in October 2015.
As well as the financial penalties, the company was ordered to pay ASIC’s litigation costs and also post notices on the website about the statements being misleading.
It comes as the Australian Competition and Consumer Commission (ACCC) announced its own crackdown on misleading statements.
The ACCC will be targeting product packaging once the new country of origin laws on food products come into effect on 1 July 2018, with businesses expected to change their packaging before that date in order to remain compliant.
Businesses may also find themselves in the firing line if they are found to be influencing customers’ reviews of their product or service, which in itself can be construed as producing misleading statements, according to a media law specialist.