Australia’s ANZ Banking Group Labels US Class Action Against it “Strange” and “Without Foundation”

Australia-based ANZ Banking Group Ltd said Tuesday that a class action filed against it by US law firm Vianale & Vianale in the SDNY over certain disclosures is “starnge” and “without foundation,” The Age reports.

The lawsuit was filed on Monday alleging that ANZ violated US securities laws by failing to adequately disclose the range of risks arising from its loans to the failed Opes Prime.  According to the complaint, ANZ lent hundreds of millions of dollars to Opes Prime, but without adequate disclosure of the risks the loans posed to ANZ. The day before ANZ announced its losses stemming from exposure to Opes Prime, its stock (ADRs) closed at a high of $17.24. The following day, after ANZ’s announcement, ANZ’s stock price dropped to $14.50, and it currently trading at $9.90.

ANZ’s American Depositary Receipts (ADRs) at issue in the complaint were traded from March 2, 2007 to July 27, 2008.

An ANZ spokesman said on Tuesday that the bank had no financial disclosure obligation in relation to Opes Prime:

“The matter is not financially material to ANZ nor has there been a financial loss,” he said.

“The action by Vianale & Vianale appears strange.

“The action is without foundation, and we will obviously be defending it vigorously.”

“Of the losses suffered by ADR purchasers, ANZ said: “The share price movements quoted (by the law firm) appear to relate to the bank’s earnings updated during 2008 and the disclosures made relating to credit intermediation trades, not Opes Prime”.

Read the article in The Age

Read the press release about the US action