Australian Court Fines Southern Cross Payments A$10 Million

The Federal Court of Australia has ordered Southern Cross Payments Ltd - formerly operating as iSignthis Ltd - to pay a A$10 million penalty after finding the company breached disclosure laws between 2018 and 2020. Former managing director and chief executive officer, Nickolas John Karantzis, was separately ordered to pay A$1 million and has been banned from managing corporations for six years.

The penalties follow an earlier judgment by Justice McEvoy, who concluded that iSignthis misled investors in August 2018 by stating that less than 15% of its total revenue in the fourth quarter to 30 June 2018 came from one-off or set-up fees. The court found the company had in fact recognised about A$3 million in one-off and non-recurring revenue, alongside A$2.85 million in one-off costs, without properly disclosing these figures.

The court also found iSignthis failed to inform the market in May 2020 that payment network VISA had terminated its relationship with the company, and did not disclose VISA's reasons for doing so. Justice McEvoy determined that Mr Karantzis was involved in these breaches, failed to act with reasonable care and diligence, and did not ensure statements to the ASX were accurate and not misleading.

The Australian Securities and Investments Commission initiated civil penalty proceedings in December 2020. iSignthis changed its name to Southern Cross Payments in May 2022 and was delisted from the ASX in November the same year. The court's orders bring the long-running case to a close.