The Full Bench of the Federal Court on Wednesday (October 2) morning upheld a finding that Australia and New Zealand Banking Group (ANZ) breached continuous disclosure obligations when it failed to disclose a $790 million surplus in August 2015.

During a 24-hour trading halt, ANZ undertook a fully underwritten institutional share placement to raise $2.5 billion with underwriters Citigroup Global Markets, Deutsche Bank AG and JP Morgan.

ANZ did not disclose that the insurers would underwrite 31 percent of the placement, valued at between $754 million and $790 million, either in its announcement that the placement had closed or previously.

Last year, Judge Mark Moshinsky fined the banking giant $900,000 and opened the door to a potential class action lawsuit.

The judgment is based on Corporations Act 2001 and the ASX listing rules, which provide that registered persons must promptly disclose information that is not generally available and that a reasonable person would expect to have a material effect on the price or value of the securities.

In its appeal, filed last December, ANZ argued that Justice Moshinski erred in finding that the specified information relating to the insurers' location fell within the Companies Actand claimed it was "irrelevant to the value of ANZ's shares".

ANZ added that Judge Moshinski had erred in finding that a person who normally invests in securities would decide whether to acquire or dispose of ANZ shares based on information that was "irrelevant to value". .

Justice Michael Lee - with Justice Catherine Button and Justice Brigitte Markovic - said this argument "overcomplicates statutory regimes" and would not stand up to "careful scrutiny".

ANZ also failed to argue that Judge Moshinski erred by failing to consider additional context and properly consider what ANZ knew and understood. He also argued that the judge erred in finding that the specified information fell within the ASX listing rules.

Last October, Australian Securities and Investments Commission (ASIC) deputy chairperson Karen Chester said Justice Moshinsky's decision was "significant" and reaffirmed "the long-standing expectation of financial supervision that an issuer of securities must disclose material recruitment deficiencies of market capital'.

“Investors must be fully informed of information that is likely to materially affect the price or value of a security.

"In the context of capital raising transactions, ASIC expects that issuers will consider the information available to them and make appropriate disclosures to the market - particularly where capital raising is significantly underfunded," Chester said.