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A Federal Court handed down a $10 million penalty against fintech firm iSignthis — now trading under the name Southern Cross Payments — after finding the company and its former chief executive repeatedly misled investors.
Nickolas John Karantzis, who ran the firm during its rapid ascent and turbulent fall, was personally fined $1 million and banned from managing companies for six years. The ruling marks the end of a years-long investigation by the Australian Securities and Investments Commission (ASIC), which brought civil charges against both Karantzis and the company in late 2020.
In his ruling, Justice McEvoy pointed to what he described as a “repeated disregard for the law” by both the company and its chief executive. The judgment found that iSignthis misrepresented its revenue mix in 2018 and concealed a critical termination by Visa in 2020 — all while continuing to issue market statements that the court said were “misleading and devoid of transparency.”
“The community is entitled to expect that investors will not be misled, the market operator will be respected, and that questions asked by the market operator will be answered accurately and devoid of spin and obfuscation,” Justice McEvoy said in his written reasons.
Among the most damning findings is iSignthis’ claims in August 2018 that less than 15% of its quarterly revenue came from one-off or setup fees, when in fact it booked around $3 million in such income — alongside $2.85 million in one-time costs. The company also failed to disclose that Visa terminated its relationship in May 2020 and kept investors in the dark about the reasons.
ASIC Deputy Chair Sarah Court said the penalty should send a message about the importance of continuous disclosure and truthful market engagement.
“Mr Karantzis deliberately misled the market,” Court said. “This conduct resulted in significant periods of time where both the market and investors were misinformed.”
Karantzis, who made his name promoting iSignthis as a rising payments and identity verification platform, repeatedly denied wrongdoing during the proceedings.
“Mr Karantzis’ tendency to try to minimise the seriousness of his conduct and in some respects to justify it is troubling,” Justice McEvoy wrote. “It reinforces the need…for the public to be protected from Mr Karantzis’ participation in the market.”
iSignthis, which was suspended from trading in 2020 and officially delisted from the ASX in November 2022, rebranded last year to Southern Cross Payments. The company is also facing a class action suit brought by law firm Piper Alderman, alleging further breaches tied to misleading financial reporting in 2019.
A hearing related to the class action is scheduled for August 8.
