Australia’s No. 1 class action law firm Slater & Gordon Ltd is facing a class action of its own after a rival firm said it will file suit on Wednesday seeking at least A$250 million ($190 million) over alleged failings in Slater & Gordon’s stock market disclosure.
Law firm Maurice Blackburn said in a statement it will represent more than 3,000 shareholders, including pension funds and institutional investors, in a case it will file with the Federal Court against Melbourne-based company Slater & Gordon on Wednesday. Shares in Slater & Gordon fell 7 percent following the announcement of the suit.
The suit claims Slater & Gordon failed to disclose material information in a timely manner after a 2015 move to expand into Britain resulted in a profit downgrade and the collapse of its share price. Maurice Blackburn had said it was considering filing suit against its rival in December.
Slater & Gordon said in a brief statement that it had not yet been served with a class action claim, but it would inform the market if it was.
Last year Slater & Gordon agreed to pay 637 million pounds ($792 million) for the professional services unit of British insurance Quindell Plc. Soon after, Quindell was accused of accounting irregularities, leading to fierce selling in Slater & Gordon shares.
On Wednesday, Maurice Blackburn’s head of class actions, Andrew Watson said in a statement that Slater & Gordon shareholders had signed on to the action – an open action, which means all shareholders are considered plaintiffs – in “droves”.
“The number of shareholders affected mean that this case will be one of Australia’s largest shareholder actions,” Watson said.