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EML (ASX:EML) share price plunges on vow to ‘vigorously defend’ against class action

Here’s the latest on the lawsuit brought against the financial services company.
The post EML (ASX:EML) share price plunges on vow to ‘vigorously defend’ against class action appeared first on The Motley Fool Australia. –

The EML Payments Ltd (ASX: EML) share price is tumbling this morning after the company vowed to “vigorously defend” itself against a class action.

EML Payments is being sued by its own shareholders who claim the company engaged in misleading and deceptive conduct and breached its disclosure obligations earlier this year.

At the time of writing, the EML Payments share price is trading at $3.11, 4.6% lower than it was at yesterday’s close.

Let’s take a closer look at the lawsuit facing the financial services company.

EML share price plummets on more class action news

The EML share price is in the red amid more news of a class action claiming it failed to properly inform the market of the Central Bank of Ireland’s concern regarding potential anti-money laundering and counter terrorism financing framework breaches.

On 19 May, the company announced its subsidiary PFS Card Services Ireland Limited had been approached by the regulatory body regarding its concerns.

That was particularly worrying as most of the company’s European operations are run through the business.

By the end of the day, the EML share price had tumbled 45%. It’s still trading 36% lower than its level prior to releasing the announcement.

As The Motley Fool Australia reported yesterday, the class action alleges the company received notice from the Irish entity on 13 May.

Yet, it didn’t disclose the information for days after it became aware of the issue.

It’s worth noting, 13 May was a Thursday. Shares in the company traded that day and on Friday 14 May. The EML share price was put into a trading halt before the ASX opened on Monday, 17 May.

The class action is being brought about by Shine Lawyers. It was filed in the Supreme Court of Victoria yesterday.

In today’s release, the company defended itself, saying: “EML considers that it has at all times complied with its disclosure obligations in that regard. EML has not been served with the proceeding at this time, denies any liability and will vigorously defend the proceedings.”

Right now, the EML share price is 26% lower than it was at the start of 2021. However, it has gained 7.5% since this time last month.

The post EML (ASX:EML) share price plunges on vow to ‘vigorously defend’ against class action appeared first on The Motley Fool Australia.

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Motley Fool Investing expert Scott Phillips just revealed what he believes are the 5 best stocks for investors to buy right now… and EML Payments wasn’t one of them.

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More reading

Here’s why EML (ASX:EML) shareholders are suing their own company

Could the best be yet to come for the EML Payments (ASX:EML) share price?

Top broker tips 27% upside for the EML (ASX:EML) share price

4 best-performing ASX tech shares in November

2 ASX shares rated as strong buys by top brokers

Motley Fool contributor Brooke Cooper has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns and has recommended EML Payments. The Motley Fool Australia owns and has recommended EML Payments. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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