Practical guidance from the Myer case for directors and executives

  • The recent Myer case highlights the significant risks for ASX listed companies and their directors of securities class actions claims arising from breaches of continuous disclosure obligations.
  • For many it has been a revelation that informal guidance can be treated as de facto earnings guidance.
  • Now more than ever, familiarise yourself with your continuous disclosure policy and comply with it.

The recent Myer Case (TPT Patrol Pty Ltd as trustee for Amies Superannuation Fund v Myer Holdings Limited) is a landmark decision, being both the first Australian securities class action to be decided at trial and also the first to accept the concept of ‘indirect market-based’ causation in such cases. This article focuses on the practical guidance from the case which can assist directors and executives to comply with their continuous disclosure obligations, and avoid engaging in misleading or deceptive conduct.

Overview

Briefly, the case stemmed from comments made by Mr Brookes, Myer's then CEO, to analysts and journalists on 11 September 2014, when he referred to an anticipated increase in sales and an increase in net profit in FY15. This was widely reported in analysts' reports and media as referring to Myer expecting to achieve NPAT in FY15 in excess of the $98.5 million NPAT achieved in FY14. On 19 March 2015, Myer announced to ASX that it expected its FY15 NPAT to be between $75 to $80 million, following which Myer's share price and market capitalisation fell by more than ten per cent.

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