ASIC has launched a legal inquiry against ASX Limited in relation to misleading statements surrounding the Clearing House Electronic Subregister System (CHESS) replacement project.
ASIC states that ASX announcements regarding CHESS suggested the project remained “on-track” to meet future milestones and was “progressing well”.
ASIC argues that those representations were misleading as, at the time of the announcements, the project was not tracking to plan nor did ASX have reasonable basis to imply so.
Joe Longo, chair of ASIC, states: “We believe this was a collective failure by the ASX Board and senior executives at the time.
“Companies and market participants rely on what the ASX says about its operations. When the ASX falls short, it has wide ranging consequences across the market.”
Andrew Carrier, member of the executive committee at Quant, offers an explanation for the issues. He says: “ASX’s project management issues were compounded by the fact that they were building their own blockchain from scratch when public blockchains already offer scalable and secure solutions”.
This inquiry comes after ASX had paid a penalty of $1,050,000 following an ASIC investigation in March. The company is yet to determine the penalty it will now seek from ASX regarding the CHESS project.
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