The Federal Court of Australia has ordered iSignthis Ltd, now known as Southern Cross Payments Ltd, to pay a $10 million penalty for breaching disclosure laws.

Nickolas John Karantzis, its former managing director and chief executive officer, was also disqualified from managing corporations for six years and penalised $1 million for breaching his director’s duties and failing to ensure information given to the ASX was not false or misleading.

iSignthis was a business providing remote identity verification, transactional banking, and payment processing services, which engaged in a number of contraventions of the law between 2018 and 2020. It was delisted from the ASX on 4 November 2022.

The penalty and disqualification orders follow an earlier judgment by Justice McEvoy finding that iSignthis:

• engaged in misleading or deceptive conduct by representing on 3 August 2018 that less than 15% of the company’s total revenue in the fourth quarter to 30 June 2018 was from one-off or set-up fees (one-off revenue representation),
• failed to disclose from 3 August 2018 that in the fourth quarter to 30 June 2018 it had recognised approximately $3 million in one-off and non-recurring revenue and had incurred approximately $2.85 million in one-off costs, and
• failed to disclose from 12 May 2020 that VISA had terminated its relationship with iSignthis and failed to disclose VISA’s reasons for termination.

Justice McEvoy also found Mr Karantzis:

• failed to exercise his powers and discharge his duties with reasonable care and diligence,
• was involved in the failure of iSignthis to comply with its continuous disclosure obligations regarding the recognition of revenues and costs in 2018, and
• failed to take reasonable steps to ensure information that he gave to the ASX regarding the termination by VISA was not false or misleading.

On 7 December 2020, ASIC commenced civil penalty proceedings in the Federal Court against iSignthis Ltd and its managing director and chief executive officer Nickolas John Karantzis.

On 21 June 2024, the Federal Court found iSignthis Ltd engaged in a number of contraventions of the law between 2018 and 2020.

On 11 May 2022 (ASX:SP1), iSignthis Limited (ASX:ISX) changed its name to Southern Cross Payments Ltd (ASX:SP1). On 4 November 2022, Southern Cross Payments Ltd was delisted from the ASX.