Stockbroker from SA in court over negligence allegations
A director of a high-profile stockbroking and financial advisory firm is in court over an investor in a health tech business losing more than $1 million.
A New South Wales man is in court claiming a stockbroker, formerly of South Australia, encouraged him to hold onto shares in an ailing listed medical technology company, which he claims led to losses of $1.2 million as a result.
These claims are refuted by Taylor Collison director Thomas Whiting, who is the defendant in the NSW court action. His firm, which has offices in Adelaide and Sydney, is also referred to in the pleadings.
The case was last heard yesterday, when it was listed before Supreme Court Justice Richard Cavanagh on December 4 for another hearing.
Registrar Jennifer Hedge in the directions hearing yesterday ordered the defendants to file and serve any expert evidence on or before November 20.
According to filings in the New South Wales Supreme Court, the plaintiff, Sydney man Carmelo Antonio Cannavo and his company Crestpond bought 22 million shares in a company called Tali Digital (TD1) at a median price of $0.052 per share.
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Tali Digital is an Australian digital health medical device company listed on the ASX with a market capitalisation of $4.84 million.
At the time of buying the shares, it is claimed that Cannavo did not have an account with Taylor Collison and he bought them before engaging with Whiting.
Cannavo claims that in or around late 2021, Whiting represented to Cannavo that his close relationship with Tali Digital “provided him with unique insight into TD1’s prospects, future performance and value” – a claim denied by Whiting.
The plaintiff claims he then sought advice from Whiting regarding prospects and future performance of TD1, including whether he should hold, sell or buy shares in the company – also denied by Whiting.
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Taylor Collison was involved in capital raising activities for TD1, acting as the sole lead manager, underwriter and corporate advisor on multiple occasions.
In Cannavo’s Statement of Claim, seen by InDaily, the plaintiff claims Whiting “represented to Mr Cannavo that his close relationship with TD1 provided him with unique insight into TD1’s prospects, future performance and value”. Claims that are denied by Whiting.
“At all relevant times, Mr Cannavo was consistently provided advice and reassured by Mr Whiting of the strong potential for growth in TD1,” the Statement of Claim reads.
Subsequently, Cannavo claimed he opened accounts with Taylor Collison specifically seeking advice on TD1 and other investments.
It is alleged that: “Mr Whiting represented to Mr Cannavo that the value of TD1 shares would significantly increase over the following 12 to 18 months, forecasting an appreciation to approximately $0.50 per share – a near 10-fold increase from Mr Cannavo’s median purchase price.”
Cannavo goes on to claim that Whiting “continued to reassure” the defendant about the “strong position” of TD1, despite broader deteriorating market conditions for small-cap technology stocks and “growing concerns about TD1’s management and operational stability”.
Cannavo claimed Whiting breached his fiduciary duties to the investor and “as a direct result of these breaches, Mr Cannavo… suffered substantial financial losses”. He also claims Whiting made false or misleading statements, engaged in unconscionable and misleading or deceptive conduct and was negligent.
Whiting meanwhile claimed that he “did not provide and [was] not required to provide personal advice to the plaintiff”.
He also relies on claiming Cannavo was a “sophisticated investor” and Whiting claimed the plaintiffs had access to information about “significant challenges” faced by the company and the broader market.
“The failure by the plaintiffs to sell the shares they owned in TD1 constituted a failure on their part to take reasonable care,” Whiting’s defence reads.
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