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Electro Optic Systems (EOS) has been ordered to pay $4 million for allegedly continuously breaching disclosure requirements.
A Federal Court judge has ordered that EOS pay $4 million after the defence company admitted to failing to adequately disclose to the ASX its projected revenue downgrade in 2022.
The court heard that EOS told the ASX in May 2022 that their forecast revenue would likely equalise or exceed the previous year’s profit of $212.3 million.
However, in July 2022, EOS admitted to knowing that their revenue was likely to look more like $164 million.
The company did not inform the ASX of investors of this until late October 2022.
For the full year, EOS landed on a revenue of $137.9 million, a 35 per cent decrease compared to $212.3 million in 2021.
“This result demonstrates that continuous disclosure is fundamental to keeping investors properly informed,” Australian Securities and Investments Commission chair Joe Longo said.
“When a listed company becomes aware of material changes to guidance, it must act promptly to disclose these to the market.
“Delays in correcting market‑sensitive information undermine market integrity and investor confidence,” Longo added.
Justice Ian Jackman deemed that $4 million was adequate remuneration, noting: “[It] is sufficiently substantial, having regard to EOS’ size and financial resources, to achieve both specific and general deterrence, without being oppressive or disproportionate.”
Director and former CEO of EOS, Ben Greene, was sued by ADIC in November last year for this matter and has “separately commenced proceedings” into claimed breaches in directors’ duties.
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