Iluka resources: lessons for shareholders in securities class actions

In the third decision delivered in a shareholder class action in Australia,1 Iluka Resources Limited (Iluka) has succeeded in its defence of a securities class action which alleged that it had:

1. engaged in misleading or deceptive conduct; and
2. breached its obligations under Australia's continuous disclosure regime

for failing to inform its shareholders of its inability to achieve its forecast sales and to provide reliable sales forecasts for the 2012 calendar year.

Background

Iluka is a miner and global supplier of mineral sands products. Its products include zircon, rutile, and synthetic rutile. On 9 July 2012, Iluka significantly revised its sales guidance for these products, resulting in a 25% drop in its share price.