Slater & Gordon, one of the world’s first publicly listed law firms, faces a potential class action law suit from shareholders following a collapse in its share price prompted by regulatory and financial difficulties following a major acquisition in the UK.
The Australian firm, which is better known for launching class action lawsuits on behalf of its clients, is being targeted by a rival law firm Maurice Blackburn Lawyers, which on Wednesday began taking shareholder complaints as it considers taking an action, writes the FT’s Jamie Smyth in Sydney.
“We encourage you to register your details with us in order to get the best legal representation possible should a shareholder class action ensue,” said Maurice Blackburn in a post on its website.
The potential class action law suit is the latest in a series of regulatory and financial problems to engulf Slater & Gordon since it acquired the professional services arm of UK firm Quindell in April. The firm’s ASX-listed shares have lost 90 per cent of their value since then, falling from above A$6 to A$0.98 on Tuesday’s close. They were down a further 3.6 per cent this morning in Sydney.
Slater & Gordon faces a probe by Australian regulators over its accounting practices while Quindell is under investigation by the Serious Fraud Office over its “business and accounting practices”. A proposed change in UK law affecting the personal injury market has also shaken the confidence of investors. Last week Slater & Gordon withdrew earnings guidance that it had previously reaffirmed on November 30, prompting a share sell off.
“These issues raise significant concerns about the timing and accuracy of information released by SGH to the market,” said Maurice Blackburn on its website.
A spokeswoman for Slater & Gordon had no immediate comment.