Quinn Emanuel Urquhart & Sullivan has filed a class action lawsuit against Australian Securities Exchange-listed law firm Shine Corporate Ltd., accusing it of misleading investors with its financial disclosure.
In the lawsuit, Dodd v. Shine Corporate Ltd., filed by Quinn Emanuel in Queensland Supreme Court on behalf of representative plaintiff and fund manager Allen Dodd, Shine Corporate was blamed for a 73 percent drop in its share price on Jan. 29, 2016, after the firm cut its earnings forecast for the financial year ending June 30, 2016, by half—to $18.4 million (A$26 million) from $38 million (A$54 million).
According to filings to the Australian Securities Exchange (ASX), Shine Corporate argued that the decreased profit forecast was due to a more conservative estimate of income from active cases. Quinn Emanuel, alongside Australian litigation funding firm Regency Funding Pty. Ltd., said that Shine Corporate should have known of all the factors that might contribute to a lower income but failed to disclose them to investors between 2014 and 2016.
The U.S. litigation firm is now recruiting plaintiffs who were Shine Corporate’s investors between August 2014 and January 2016. Shine Corporate was listed in May 2013. The Brisbane-based firm’s core business is personal injury law practice, and it, too, handles class actions.
The case was filed following the July settlement between another ASX-listed personal injury law firm—Slater and Gordon—and Sydney-based class action firm Maurice Blackburn. Slater and Gordon agreed to pay $27.8 million (A$36.5 million) to its shareholders following a two-year-long legal battle.
The Dodd case is led by Quinn Emanuel Sydney partner Damian Scattini, who happens to be an alumnus of both Maurice Blackburn and Slater and Gordon. Scattini, a class actions specialist, joined Quinn Emanuel in 2015 from Maurice Blackburn, where he was practice leader in Queensland. He moved to Maurice Blackburn from Slater and Gordon and worked his way up to become a name partner at his previous firm— Quinn & Scattini .
Shine Corporate said in a filing to the ASX that the class actions brought by Quinn Emanuel would be “vigorously defended.”