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Steadfast Group (ASX: SDF), the owner of Australasia's largest general insurance broker network, has received notices from the corporate watchdog relating to share trades from employees that took place prior to - but not necessarily in relation to - a damaging report from the ABC's Four Corners that sent its share price plunging.
An announcement today from Sydney-based Steadfast did not specify the nature of the investigation and trades or allude to any connection to the Four Corners report.
The Four Corners report alleged the company misled clients by participating in “undisclosed schemes to give strata management firms a cut of the fees apartment owners pay” - claims the company and an independent report have refuted.
The latest investigation may well relate to other matters entirely, but the dates in question for the trades were less than two weeks prior to the exposé going public.
It is unclear at this time which specific employees are being investigated by the Australian Securities and Investments Commission (ASIC), or whether they knew of the ABC's reporting.
Business News Australia has reached out to both ASIC and Steadfast for further clarification, and Steadfast has declined to provide any additional comment.
Between the close of trading on Friday, 6 September and Tuesday, 10 September - the day after the investigation aired with a print article and broadcast - SDF shares dropped 16 per cent to $5.32.
"Steadfast has received statutory notices from ASIC requesting Steadfast to produce certain documents and information in relation to the trading by two Steadfast employees in Steadfast securities between 30 August and 2 September 2024," the company revealed.
"Steadfast is reviewing the correspondence from ASIC and will respond in compliance with its legal obligation.
"It is not certain whether ASIC will take any action as a result of its investigation, or what may be the scope of any such action."
Steadfast in damage control as ‘kickback’ allegations on strata insurance refuted
In its response to the controversy on 9 September, Steadfast expressed its disappointment with what it claimed was a "selectively presented" report, noting it had provided the ABC with information on 29 August and 4 September that was not included in its coverage.
On 2 December, Steadfast announced that an internal review of its large specialist strata broker and underwriting agency subsidiaries has not found any evidence of the channeling of incentives between Steadfast and related entities, or deliberate actions or inactions relating to non-compliance with regulatory or legislative obligations.
It must be reiterated that no details regarding the substance of ASIC's investigation have yet been revealed. While the timeline of dates correlates with a potential investigation of this nature, knowledge of the report and its likely negative impacts on the share price is not necessarily the substance of the regulator's inquiries.
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