Australian Securities and Investments Commission v iSignthis Limited (Penalty)

This was a Federal Court penalty decision in long-running proceedings brought by ASIC against iSignthis Limited and its former chief executive officer and managing director, Mr Nickolas John Karantzis. The Court had already decided the liability issues in June 2024. The 2025 judgment did not revisit liability from the beginning. Instead, it decided what sanctions should be imposed after those earlier findings.

The Court said the penalty reasons should be read together with the earlier liability judgment. That is important because the penalty judgment assumes the reader already knows the underlying factual detail. Even so, the penalty reasons clearly identify the main categories of conduct that led to sanctions. They included failures to notify the ASX about the One-off Revenue/Costs Information, the Visa Termination Decision, and the Reasons for Visa’s Termination.

They also included findings against Mr Karantzis concerning the One-off Revenue Representation and a 25 May 2020 letter to the ASX.

The commercial story, at the level the judgment itself records, is therefore about a listed company that did not disclose important information to the market within the required periods, and a senior officer who was found to have been involved in serious related contraventions. The Court described the contraventions as involving misleading the market and the market operator, having a serious impact on the market, and being deliberate and continuing.

The clearest way to read this case is in two stages. Stage one was liability. On 21 June 2024, the Court delivered Australian Securities and Investments Commission v iSignthis Limited [2024] FCA 669. In that earlier decision, the Court found that iSignthis had contravened ss 1041H and 674(2) of the Corporations Act 2001 (Cth), and that Mr Karantzis had contravened ss 180(1), 1309(2), 1309(12) and 674(2A).

Stage two was penalty. On 26 July 2024, the Court made declarations of contravention under s 1317E giving effect to the liability findings. The 8 August 2025 judgment then addressed the consequences of those declarations.

That included whether Mr Karantzis should be disqualified from managing corporations, what pecuniary penalties should be imposed on him and the company, and how the Court should assess seriousness, deterrence, public protection, contrition, cooperation and the defendants' claimed mitigating factors.

For business readers, this distinction matters. A penalty judgment often contains less factual narrative than a liability judgment because the Court is no longer deciding whether the conduct happened. It is deciding what orders are justified now that liability has already been established. That is exactly what happened here.

The judgment identifies the company contraventions with precision. According to the declarations summarised by the Court, iSignthis contravened s 674(2) by failing to notify the ASX of the One-off Revenue/Costs Information from 3 August 2018 until 15 November 2019, by failing to notify the ASX of the Visa Termination Decision from 12 May 2020 until 17 August 2020, and by failing to notify the ASX of the Reasons for Visa’s Termination from 12 May 2020 until 26 October 2020.

The Court said each of those contraventions was serious within the meaning of s 1317G(1)(b)(iii).

The judgment also identifies the findings against Mr Karantzis. The Court recorded that he contravened s 180 in respect of making the One-off Revenue Representation and in respect of the company’s failures to notify the ASX of the One-off Revenue/Costs Information, the Visa Termination Decision and the Reasons for Visa’s Termination. He also contravened s 674(2A) through his involvement in the company’s contravention relating to the One-off Revenue/Costs Information.

In addition, the Court recorded contraventions of ss 1309(2) and (12) in relation to the 25 May 2020 letter to the ASX.

That means this was not just a case about silence. It was also a case about what was affirmatively communicated. The Court’s headings in the judgment reinforce that point. Separate sections deal with the One-off Revenue Representation, the One-off Revenue/Costs Information, the Visa Termination Decision and the Reasons for Visa’s Termination, and the 25 May 2020 letter to the ASX.

For listed companies, that is a useful reminder that disclosure risk can arise both from failing to say something and from saying something inaccurate or misleading.

Once liability had been established, the Court had to decide what orders were appropriate under the Corporations Act. For Mr Karantzis, the Court considered disqualification powers under ss 206C(1) and 206E(1). The judgment explains that disqualification is primarily about protection of the public from harmful use of the corporate structure or conduct contrary to proper commercial standards. The Court also considered pecuniary penalties under s 1317G, which are primarily directed to specific and general deterrence.

The Court set out the general principles it would apply. It accepted that disqualification and pecuniary penalties serve different purposes and may both be appropriate in the same case. It referred to factors such as the seriousness of the contraventions, whether the conduct was deliberate or continued over time, the likely risk of similar conduct in the future, the harm caused to the public, the experience of the director, any contrition or remorse, and whether there had been cooperation with the regulator.

It also noted that penalties must be proportionate and should not be so low as to become an acceptable cost of doing business.

The parties were far apart. ASIC sought a ten-year disqualification order, a $1.5 million penalty against Mr Karantzis and a $12.5 million penalty against the company. The defendants accepted that some penalty should be imposed, but argued for much lower amounts and said disqualification would be wholly inappropriate. The Court therefore had to decide not only whether sanctions were justified, but how severe they should be.

The Court imposed substantial sanctions. Mr Karantzis was disqualified from managing corporations for six years under ss 206C(1) and 206E(1). He was also ordered to pay a pecuniary penalty of $1 million within 30 days under s 1317G(1) in respect of his contraventions of ss 180(1), 674(2A) and 1309(2) and (12) identified in the earlier orders dated 26 July 2024.

The company, identified in the orders as Southern Cross Payments Ltd, formerly iSignthis Ltd, was ordered to pay a pecuniary penalty of $10 million within 30 days under s 1317G(1) in respect of its contraventions of s 674(2) identified in the earlier orders. The Court also made directions for written submissions on costs if the parties could not agree.

Although the Court did not grant ASIC everything it sought, the sanctions were still very significant. The judgment’s catchwords and introductory passages make the Court’s reasoning clear at a high level. The contraventions were described as serious, deliberate and continuing. The Court said they involved misleading the market and the market operator and had a serious impact on the market.

It also recorded an absence of contrition and cooperation, and said that asserted mitigating factors, including reliance on external legal advice, were not exculpatory.

For listed companies, the message is direct. If information is market-sensitive, delay can be as dangerous as an outright false statement. The declarations in this case involved extended periods during which the ASX was not notified of important information. The Court treated those periods of non-disclosure as serious contraventions. Businesses should not assume that a problem can be managed internally while they wait for more certainty, commercial negotiations or a better public narrative.

The case also shows that senior officers can face personal consequences where they are involved in disclosure failures or communications to the ASX that contravene the Act. A founder, CEO or managing director cannot treat disclosure as a matter for investor relations alone. The Court’s orders against Mr Karantzis show that personal penalties and management disqualification are real possibilities where the conduct is serious enough.

Another practical point is the Court’s treatment of legal advice. The judgment records that reliance on external legal advice was asserted as a mitigating factor, but the Court said it was not exculpatory. That does not mean legal advice is unimportant. It means advice is not a substitute for proper governance, accurate facts, and directors and officers exercising their own responsibilities under the Act.

The structure of the judgment is useful in itself because it shows the kinds of documents and events that can become central in a disclosure case. The Court separately addressed the One-off Revenue Representation, the One-off Revenue/Costs Information, the Visa Termination Decision, the Reasons for Visa’s Termination and the 25 May 2020 letter to the ASX. That tells business readers that courts will look closely at both the underlying commercial event and the exact wording used in market or ASX communications.

In practice, that means businesses should preserve a clear documentary trail. If a major customer, payment network, supplier, financier or platform makes a decision affecting revenue, operations or reputation, the company should be able to identify when it learned of the event, who was told, what internal analysis was done, what legal advice was obtained, what draft announcements were prepared, and why any disclosure timing decision was made.

A weak paper trail can make it much harder to explain or defend a delayed disclosure decision later.

It also means that communications with the ASX should be treated as formal legal communications, not just correspondence to be handled quickly. The Court’s findings concerning the 25 May 2020 letter to the ASX underline that point. Accuracy, completeness and consistency with the underlying facts matter.

A practical disclosure framework should be built around trigger points, ownership and records. Trigger points are the kinds of events that must be escalated immediately. Ownership means there is a clear decision-maker or committee responsible for assessing disclosure obligations. Records mean the company can later show what it knew, when it knew it, and why it acted as it did.

For directors, the case is a reminder that governance systems need to work in real time. It is not enough to have a disclosure policy sitting in a board pack if major events are not being escalated quickly or if draft announcements are not being checked against the actual reasons for the event. The Court’s description of the conduct as deliberate and continuing shows how seriously it viewed sustained failures rather than one-off mistakes.

The judgment gives a clear procedural timeline. The liability judgment was delivered on 21 June 2024. Declarations of contravention were made on 26 July 2024. The penalty hearing took place on 21 and 22 October 2024, with last submissions on 17 December 2024. The penalty judgment and orders were delivered on 8 August 2025.

The orders also dealt with costs procedure. If the parties could not agree on costs, they were directed to file written submissions by 5 September 2025, with responsive submissions by 19 September 2025, and the costs question would then be determined on the papers.

For business readers, this timeline is a reminder that enforcement proceedings can unfold over a long period. The commercial and reputational consequences of a disclosure issue can therefore continue well beyond the original event itself.

This page summarises Australian Securities and Investments Commission v iSignthis Limited (Penalty) [2025] FCA 917, a Federal Court of Australia decision delivered by McEvoy J on 8 August 2025. The Court expressly stated that the penalty judgment should be read together with Australian Securities and Investments Commission v iSignthis Limited [2024] FCA 669, which contains the earlier liability findings.

Because this page focuses on the penalty judgment, it uses the Court’s own labels for the conduct in issue and does not attempt to restate every factual detail from the earlier liability reasons. Readers wanting the full factual narrative should read both judgments together.