imf against the grains trader awb

Thoughts on this ?
Sounds like IMF will go hard for AWB $'s

Regulator clears path for existing class action

ELISABETH SEXTON
November 5, 2009

THE corporate regulator has removed a shadow which has been hanging over shareholder class actions since a court victory by the construction company Brookfield Multiplex on October 20.

The Australian Securities and Investments Commission will excuse class actions begun by the close of business yesterday from the impact of the decision.

A full bench of the Federal Court upheld an appeal by Brookfield Multiplex that the litigation funding arrangement and solicitors' retainer for the plaintiff shareholders constituted a managed investment scheme.

The Corporations Act requires managed investment schemes to be registered, unless ASIC grants an exemption.

Late yesterday the regulator said the judgment ''has the potential to disrupt the conduct of a number of class actions under way''.

ASIC said it would grant transitional relief to avoid any adverse impact on plaintiffs and any interference with ''the timely and efficient conduct'' of existing class actions.

''The relief will allow time for the Government and ASIC to consider and consult on how funded class actions should be regulated,'' it said.

The most immediate effect would have been felt in an investor suit funded by IMF (Australia) against the grains trader AWB, which is scheduled to begin on November 30.

On Monday AWB challenged the funding arrangement, saying that on the basis of the full court decision, IMF was running an unregistered managed investment scheme and hence was in breach of the Corporations Act.

If not exempted, it would need a financial services licence, a product disclosure statement and a complying constitution.

No orders have yet been made about the consequences of the judgment for the Brookfield Multiplex case. Submissions are due next week.