The case was brought by the Financial Markets Authority. Photo: Google Street View
- Financial regulator wins case over executive's responsibilities
- Senior executive of the failed CBL insurance group found liable for non-disclosure
- CBL was valued at $750 million when it collapsed in 2017
A High Court judgement has put a spotlight on the responsibilities of senior company executives.
It's ruled that the chief financial officer (CFO) of the collapsed CBL Insurance Group (CBLC), Carden Mulholland, was an accessory to the breaking of information disclosure rules.
The case was brought by the Financial Markets Authority (FMA) against Mulholland, the former managing director Peter Harris, and some directors of the failed group. All but Mulholland settled out of court.
The Court ruled that Mulholland had the knowledge and participated in decision making, which resulted in information about the group's financial position not being disclosed to investors quickly enough.
He was found liable for three breaches, but not for two other alleged breaches.
The FMA's head of enforcement Margot Gatland said the judgement was important.
"It sets an important precedent for holding a CFO accountable for an entity's continuous disclosure breaches and provides judicial guidance for senior executives of listed entities in respect of the continuous disclosure requirements."
"The FMA considers the findings of liability against Mr Mulholland reflect serious misconduct by a senior officer of CBLC who failed to comply with fundamental obligations of the continuous disclosure regime."
A hearing will be held later to determine a penalty on Mulholland. The FMA settled a similar case against the managing director and some directors of the failed group in 2023 and 2024 leading to financial penalties totalling $5.5m.
CBL, once a sharemarket high flier, collapsed in 2017 valued at $750m, triggering a string of investigations and legal cases by the FMA and Serious Fraud Office.
The FMA has one outstanding case against Mulholland, Harris, and the estate of a now deceased director for alleged breaches of financial market rules over the CBL share issue in 2015. It is set for hearing in April 2026.
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