- Secure payments company iSignthis (ISX) has taken its battle with the ASX to the Federal Court
- iSignthis launched legal action against the market operator for refusing to lift its suspension of company shares
- The ASX suspended iSignthis' shares in early October to launch some enquiries about company operations
- iSignthis responded to each round of questions with great detail
- Now, iSignthis is claiming the ASX is acting unfairly as it refuses to reinstate shares
- The ASX is yet to respond to today's news
- Nevertheless, iSignthis shares remain frozen after last trading for $1.07 each in October
In its battle to get shares back on the market, iSignthis (ISX) has taken the Australian Securities Exchange (ASX) into Federal Court territory.
The secure payments company launched legal action against the manager of the Aussie stock market today to have its forced trade suspension lifted.
iSignthis said in an announcement to the market investors are being denied the opportunity to trade their shares as the ASX fails to act honestly, fairly, and in good faith regarding its suspension of ISX shares.
Topping off the accusations of the unlawful continued suspension, iSignthis claimed the ASX leaked confidential company information.
iSignthis Chairman Tim Hart said the decision to head to court was regretful but necessary.
"We have taken this step in order to lift the suspension of ISX’s shares. We are acting in the interest of our shareholders, as they have been denied the basic right to trade our shares for too long,” Tim said.
The nine-week battle
iSignthis' shares were unexpectedly suspended on October 2 as the ASX and the Australian Securities and Investments Commission (ASIC) launched a series of enquiries regarding iSignthis' cryptocurrency customers and some company loans.
One week later, iSignthis released its response to the queries, hoping it would be enough to satisfy the sharemarket operator and the investment watchdog.
What followed was three more rounds of questioning from the ASX over the next six weeks. The enquiries requested clarification around iSignthis' client fund holder selection, country-by-country revenue, customer website names, unreported customer agreements, and more.
iSignthis, determined to get shares back in circulation, responded to each question in each round of queries with explicit detail.
Company CEO John Karantzis said the responses were crafted with patience and good faith but to no avail.
"We have answered scores of questions and provided more than 2000 pages of confidential documents dating back almost three years. We have been patient and acted in good faith, but the company’s shares have been suspended for nine weeks."iSignthis CEO John Karantzis
The company hinted in late November that some legal action was under consideration after the ASX's ongoing refusal to put ISX shares back up for grabs.
"The Australian Stock Exchange enquiries continue to impact management’s time and focus, with a review on the impact to be taken by the Board in early December," the company wrote in an announcement to the market.
At the core of its claims against the ASX is iSignthis's confusion regarding the actual reason for the suspension.
Congruent to the ASX queries, ASIC has also been conducting an investigation into iSignthis. As such, iSignthis claims the ASX's position as of early November is that it would not lift the suspension while the ASIC investigation was underway — even if iSignthis satisfied its queries.
In response, iSignthis said many companies face investigations from ASIC every year without having their shares locked up. Therefore, the company claimed, "no valid reason had been given why ISX should be treated differently".
In light of this, iSignthis has accused the ASX of breaching its requirements to act fairly and in good faith both during the initial suspension of ISX shares and the ongoing back-and-forth with the company.
iSignthis said it is concerned the ongoing forced trading halt could hurt its standing with investors, customers, and suppliers.
Along with damages and costs, iSignthis is seeking a Federal Court order to make the ASX reinstate company shares.
The ASX's tight lip
The ASX has not yet responded to iSignthis' big move today.
While the legal action is unlikely to have taken the ASX by surprise given iSignthis' November comments, the market operator has stayed quiet as of 12:35 pm AEDT.
In the meantime, iSignthis shares remain in limbo. They last closed on October 1 for $1.07 apiece.