HSF fined

👋 G’day

Today’s brief:

• HSF fined £465k for Russian sanctions breach.

• Law firms remain serious targets to cyber attacks despite new reporting.

• See which practice areas lead on law firm growth.

Here’s the latest👇

PRACTICE POINTS

Defamation misstep

• Federal Court sets defamation line in racial vilification reporting. In recent decision, the Court awarded $600k in damages against Channel 7 after it falsely implied three NRL fans were guilty of racially abusing Brent Naden. Meanwhile, Fox Sports and Channel 9 escaped liability by relying on an defence. Critically, Channel 9 presented the story as allegations, adopting “allegedly” and “alleged” in their coverage which was a key difference. Channel 7’s tone, language and lack of qualifiers tipped it into defamation territory. The ruling is a stark warning: when publishing on sensitive allegations, the line between fact, opinion, and implication matters.

• ASIC has clarified its stance on market integrity penalties. The regulator has updated RG 216 to clarify that any penalty imposed by the Markets Disciplinary Panel for breaching market integrity rules must:

  • be proportionate to the conduct of the market participate – it should strike a reasonable balance between deterrence and oppressive severity

  • promote market integrity by acting as a deterrent to future misconduct

  • be just and appropriate.

• QAR reform bill lands – but it's slim pickings – Treasury has released a consultation draft Bill for tranche 2 of the “Quality of Advice Review”, proposing to (1) replace Statements of Advice with a 'Client Advice Record', (2) give super trustees more flexibility on advice fees, and (3) exempt targeted prompts from personal advice rules. But for insurers, banks and non-super advisers, there’s little on offer—the big-ticket reforms, like changes to the best interests duty and new adviser class, are still in the works. Consultation closes 2 May 2025.

WORD ON THE STREET

HSF’s £465k sanctions breach

• HSF has been fined £465k after its former Moscow office paid £3.9m to sanctioned Russian banks during the hasty closure of its Moscow office. The firm blamed human error, but UK authorities pointed to due diligence failures showing a “pattern of failings”. The payments, made over 7 days, included redundancy settlements to staff with Sberbank accounts, as well as fees for audit services and insurance products. Despite self-reporting, a ministerial review upheld the fine: Guardian, Politico

• Maddocks has added Chloe Costas and Sarah Pearce as special counsel to its real estate and probity teams in Canberra. Costas brings major project experience from Minters and Eversheds, while Pearce jumps from Proximity, where she led the probity practice. The hires lift Maddocks’ Canberra special counsel count to eight: Australasian Lawyer

• Thomson Reuters says Aussie law firms are riding high off “exceptional” FY24 results, with billable hours up 4.6% and fees earned jumping 9.2%. And 3 in 4 clients expect their total legal spend to increase or stay the same in the remainder of FY2025. Here’s the growth run down:

  • Banking up 10.5%

  • Workplace relations up 6.9%

  • Construction up 4.3%

  • DR up 3%

  • M&A down 3%

  • Restructuring down 1%

TALKING POINTS

Asteroid mining becomes reality?

• Asteroid mining is inching closer to reality, with US Startup Astro Forge believing it’s the first company to get there. Although the firm has communication problems with its Odin spacecraft, it’s still shooting for the stars. It hopes to reach asteroid 2022 OB5 to assess its platinum-group metal content. The long-term goal is to extract metals like rhodium worth up to US$183,000 per kg, and then eventually set its sights on space-built economies: BBC

• Law firm Brydens Lawyers is still dealing with the fallout from a recent cyber attack. Brydens followed in the footsteps of HWL Ebsworth's 2023 breach and refused payment. But that hasn’t always been the move. Some speculate that very large law firms have paid very larges sums of money amidst a cyber attack. New ransomware payment rules starting next month will require businesses with turnovers above $3m to report any payments. And there is clear incentive for law firms to pay up compared to other organisations, says Hamilton Locke partner James Patto. If a handful of major clients lose trust, the firm can lose a lot of revenue very quickly: Capital Brief

• Treasurer Jim Chalmers will drop his upcoming budget tonight in Canberra. This is the Gov’s last pitch for voters ahead of the May election. Chambers will reveal a better than expected debt-to-GDP ratio, but we’ll have to cosy up to deficit for the next 10 years or so despite efforts to showcase improved fiscal health. The headline is “It’s not as bad a COVID”, which is fair – but with its $6.8bn power bill relief package which could have bought 500k Tesla batteries or perhaps supplied 900k solar roofs… the debate continues as to where that money should go: AFR, Bloomberg

TREASURY

DEAL ROOM

Gold Fields’ “opportunistic” play

• Gold Road knocks back Gold Fields’ $3.3bn bid, rejecting the $3.05-per-share offer as “highly opportunistic” and undervaluing its 50% stake in the Gruyere gold mine. Gold Road fired back with a counteroffer to buy Gold Fields’ Gruyere stake, which was swiftly rejected. HSF acted for Gold Fields: Mining Weekly

• James Hardie shares slumped 15% after unveiling its $14bn Azek takeover, as investors were spooked at the price tag. The deal delivers a 37% premium to Azek holders, prompting funds to call it “more attractive for Azek”. CEO Aaron Erter insists it's the right time to strike, citing long-term synergy potential: AFR

• Korean chipmaker FuriosaAI rejects Meta’s $1.27bn bid, opting to stay independent despite the offer sitting KRW 400bn (A$433m) above its valuation. Talks collapsed over post-deal structure, not price, as CEO Baek Jun-ho pushed back on Meta’s terms. Meta is aggressively chasing AI chip suppliers to reduce its reliance on Nvidia: Capital Brief

• Rio Tinto-back Sovereign Metals has launched a $40m equity raising to fund the development of its Kasiya project in Malawi, tapping Petra Capital for the raise. Investors can sit along side Rio Tino which acquired a 19.9% in 2023. Sovereign Metals remains in trading halt pending details of the raise: AFR 

SECTOR SPECIFIC

Toys R Us on the brink

🚜 DIGGERS

• With its 10-year APLNG contract ending in May, Santos is urgently seeking short-term gas deals to feed its Gladstone LNG facility. Santos' contract with AGL is also due to expire in 2027. With east coast shortages forecast from 2029, new deals could be costly—piling pressure on Santos, manufacturers and household bills alike: The Australian

• Zen Energy is facing challenges in its transition to renewables, with a wind drought in 2024 forcing the company to buy electricity at high spot market prices, leading to a $51.9m loss. While a $43m investment from HD Renewable Energy aims to strengthen operations with battery storage, long-term viability concerns persist due to market volatility and contract limitations: The Australian

🏦 FIN

• ANZ to steer all new customers onto $2bn ANZ Plus platform by next year, despite mounting questions over the $1m-a-day price tag to develop and operate the platform. With $1.5bn already sunk and no firm timeline to decommission legacy tech, analysts grilled execs on blowout costs and delayed savings. ANZ says AI and “radical simplification” of its IT systems will eventually cut costs—but not before 2026: The Australian, AFR

• Australia’s most successful venture capital fund, Blackbird Ventures is quietly raising commitments for its 6^th fund, marking a new chapter with international and domestic institutional investors. The fund, following Blackbird's $1bn fifth fund, is expected to close soon, showcasing strong growth despite global fundraising challenges. Known for its early Canva investment, Blackbird’s portfolio is valued at $7bn: Capital Brief

🏡 RETAIL & REAL ESTATE

• Despite receiving a default notice from another lender, Merricks Capital has increased its loan by $30m for Milligan's 55-storey office project in Sydney’s CBD. The Halo Tower project faces delays and valuation concerns, but Merricks remains optimistic, hoping for institutional investor interest and a buyer to be secured by November: AFR

• Toys R Us is back in the red zone, with sales slumping to $3.1m and auditors warning it may not survive. The online-only retailer has a $12.8m hole in its balance sheet, no CEO, and a shrinking market cap of just $5m. Directors are banking on a line of credit from Mercer Street Capital and a new supply deal with Directed Electronics to stay afloat: AFR

📱 TECH & STARTUPS

• Apple is pouring ¥720m (A$157m) into a new clean energy fund in China, aiming to green up its supply chain as part of its 100% renewables by 2030 push. The announcement dropped during Tim Cook’s visit to Beijing, signalling the tech giant’s bid to stay in Beijing’s good books while scaling its climate commitments: Reuters

• Protecht, a Sydney-based risk management software company, started by two PwC colleagues has secured a $445m investment from PSG Equity, becoming the majority owner. The deal buys out earlier investors, including Arrowroot Capital. With a 35-40% annual growth rate, Protecht is poised to reach a $1bn valuation in 2-3 years, expanding into the US and UK markets: AFR

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