Case Study Assignment Financial Services Law Factual context The relevant events concern a kryptonite resource in Dubbo known as the Strength Project. The Project was acquired by Superman Limited in December 2019. In February 2020, a buyer entered into an agreement with a subsidiary of Superman Limited to purchase kryptonite offtake from the Project (Takeaway Agreement)1. The Takeaway Agreement was subject to the satisfaction of a number of conditions precedent, including a condition that the subsidiary obtains nance for the development and construction of the Project (Finance Condition). Material terms of the Takeaway Agreement included (a) the buyer assisting in the development, construction and nancing of a processing plant for the Project by recommending a nancial adviser who would work globally on securing nancing (Financing Mandate); (b) if the buyer exercised an option to acquire 20% of the shares in Superman Limited then it would be entitled to a discount of 10% on the base price for kryptonite supplied by the Project (Buyer's Discount); and (e) the share option would expire three months after the issuance of a bankable feasibility study (Share Option). On 19 February 2020, Superman Limited announced the Takeaway Agreement, including the Share Option and the Finance Condition. In doing so, it did not disclose the terms of the Financing Mandate or the existence of the Buyer's Discount. However, it is agreed that: The existence of a potential commercial in condence price premium or adjustment was referred to at footnote 2 of the...Announcement, a similar notation was also made in [another document] dated 21 February 2020. The existence of the Buyer's Discount was subsequently disclosed in [Superman Limited 's] announcement dated 6 March 2020. 1 A takeaway agreement is an arrangement between a producer and a buyer to purchase or sell portions of the producer's upcoming goods. It is normally negotiated before the construction of a factory or facility to secure a market and revenue stream for its future output. During a presentation at the Super hero's conference held in Hong Kong on 20 April 2020, one of the directors of Superman Limited, Mr Clark Kent, stated that (a) \"Superman Limited had secured nance for the construction of the Plant, and the buyer had committed to funding construction of the Plant\"; and (b) \"the value to Superman Limited of the Takeaway Agreement based upon the projected production volume in the Takeaway Agreement was $4.5 billion\". The representation about the funding commitment for the construction of the Plant was false because Superman Limited had not secured finance for the construction of the Plant, and the buyer had not committed to funding the construction of the Plant. The representation about the Discount applied but was not factored into the calculation. Superman Limited did not take steps at the time nor for some time thereafter to disclose to the market the errors in the representations. During a further presentation at a 121 Conference held in London on 20 May 2020, Mr Kent made the same representations he had made in Hong Kong concerning nance for construction of the Plant and the value of the production volume being $5 billion. In addition, Mr Kent stated that it was a condition of the Takeaway Agreement that the buyer commit to funding the construction of the Plant. The London presentation was released on YouTube on or about 20 June 2020 where it remained until about 20 July 2020 when it was taken down at the request of Superman Limited. On 20 June 2020, a link to the YouTube Video was posted on the website https://hotcopper.com.au. The representations that were repeated in London were false or materially misleading for the same reasons as applied to the representations made in Hong Kong. In addition, the representation to the effect that it was a condition of the Takeaway Agreement that the buyer commits to funding the construction of the Plant was false because there was no such obligation. As was the case for the representations made at the Conference in Hong Kong, Superman Limited did not take steps at the time nor for some time thereafter to disclose to the market the errors in the representations. Subsequent conduct The representation about the $4.5 billion value was retracted on 20 June 2020. At that time, Superman Limited also released to the ASX a response to an ASX query in which it disclosed the true position as to funding for the Plant. It is agreed that the disclosure was 'in line with all previous announcements made by [Superman Limited] to the ASX dated 20 April 2020, 20 April 2020 and 20 May 2020 that project financing negotiations were in progress'. It is agreed that: On 28 June 2020, the ASXreinstated the securities of [Superman Limited] to oicia/ quotation, The [Superman Limited] share price fell from its closing price on 20 June 2020 of l () cents to an intra-day low of 8.] cents (19%fall) and a closingpriee on 28June 2020 of9 cents (l()%fall). On 20 June 2020, 44 million shares were traded with a total value 0f$3.985 million, which was 5 times greater than the average volume and value of shares traded in the 5 days prior [Superman Limited] market capitalisation alsofellfrom $273.14 million on 20 June 2020 to $241 million on 20 June 2020 However, ASIC does not take the further step of alleging that actual loss was suffered as a result of the representations that were made. Senior Counsel for ASIC accepted that there would need to be 'quantitative evidence and the exclusion of confounding information and other types of information in the market' for loss to be established. ASIC commenced proceedings against Superman Limited and Mr Clark Kent. Answer the questions on the separate Answer Sheet