IMF shareholder class action conference

On 11 November 2011, IMF held its third shareholder class action conference in Sydney. For a brief summary of the conference, please click full story.
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Default interest is the weapon of choice for most Australian lenders

A loan by lender A to borrower B will generally be upon terms that B pays interest, representing A's cost of fund plus a margin, on a regular basis throughout the term of the loan. In addition, B will promise to repay the loan on a nominated date and will generally provide security for repayment of the loan and the interest upon it. The rate of interest should be set so as to recover for A the cost of his funds plus a margin, reflecting the profit to be made by A on the transaction plus the risks involved in the transaction. The loan to value ratio adopted in such a transaction should be sufficiently robust to ensure that, in the case of default, A is repaid the loan, outstanding interest and the costs of enforcing the security. Most Australian loan contracts go further than this and provide for the payment of default interest.
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Victims of corporate misconduct still face barriers to justice

Despite class actions being available in the Federal Court of Australia for 20 years, and there being no shortage of corporate scandals in that time, victims of corporate misconduct continue to experience significant barriers in using class actions to achieve justice and recover compensation. Class actions in general, and shareholder class actions in particular, remain small in number, contrary to the alarmist predictions of "floods of litigation" which had been made by early opponents of the procedure. Research by Professor Vince Morabito of Monash University indicates that, on average, only about 14 class actions are filed every year in the Federal Court, which is less than 1% of all Federal Court proceedings. Why is this so? Click full story for a discussion of the many reasons that still constrict the use of class actions to achieve compensation for wronged investors.
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Fortescue in the High Court

The High Court has recently heard an appeal by Fortescue Metals Group Ltd (FMG) in the case brought against it by ASIC for misleading and deceptive conduct. The case related to three framework agreements between FMG and Chinese contractors with respect to the railway, port and mine components of a project in the Pilbara region. The High Court is likely to decide whether statements made by FMG about the binding effect of the agreements were statements of opinion only and, if so, what effect flowed from that (namely whether the statements were misleading and/or made in breach of FMG's continuous disclosure obligations).
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