The Federal Court today imposed a $1.2 million penalty on Newcrest Mining Limited (Newcrest) for contravening its continuous disclosure obligations.

ASIC issued proceedings against Newcrest on 18 June 2014 alleging that in a series of briefings to analysts, Newcrest disclosed, from 28 May 2013, information regarding Newcrest's expected gold production for the 2013–14 financial year and on 5 June 2013 disclosed information regarding Newcrest’s expected capital expenditure for the 2013–14 financial year.

Newcrest admitted the contraventions and the parties filed a joint application for civil penalties to be imposed (refer: 14-133MR).

Today the court found that Newcrest contravened its continuous disclosure obligations under section 674(2) of the Corporations Act 2001:

• on and from 12.05 pm on 28 May 2013 continuing until 9.19 am on 7 June 2013 by failing to notify the ASX that Newcrest management expected total gold production for financial year 2014 to be approximately 2.2 to 2.3 million ounces, and

• on and from 5 June continuing until 9.19 am on 7 June 2013 by failing to notify the ASX that Newcrest management expected Newcrest’s capital expenditure figure for financial year 2014 to be approximately AU$1 billion.

The court ordered that Newcrest pay penalty of $800,000 for the first contravention (relating to the expected gold production for FY14) and $400,000 for the second contravention (relating to the expected capital expenditure for FY14).

In handing down his judgment, the Hon Justice Middleton said, ‘Within the confines of the maximum penalty of $1,000,000 for each contravention, the penalties are such to send a strong message to market participants to be mindful of the care and caution needed when interacting with analysts. These penalties also reinforce the message that equal access to market sensitive information is paramount in ensuring that markets operate on an informed, and equally informed, basis.’

ASIC Commissioner Cathie Armour said, ‘Today’s decision is clear – listed entities are responsible for managing their confidential information and must take special care during analyst and investor briefings. Selective disclosure has the potential to undermine confidence in the market and ASIC will act to enforce the law in such cases.’

ASIC’s investigation into relation persons who received this information is ongoing.

Background

In May 2014 ASIC released a report following a review of how companies and their advisers handle confidential information (refer: 14-114MR). The report included recommendations for listed entities, analysts and advisers about how to ensure they comply with best-practice disclosure policies.