The Albanese government has released draft laws forcing crypto exchanges and custody platforms into the financial services licensing regime, exposing breaches to penalties of up to $16.5m, 10% of turnover or 3x the benefit gained. The rules extend ASIC’s custody standards to settlement and trading, with carve-outs for small operators, and give ministers powers to ban risky products. Industry players welcomed the clarity, but warned that enforcement will be key to stopping unregulated competitors undercutting licensed firms. Get your views in - submissions close 24 October.

Crown class action wraps with $72.5m settlement. The Victorian Supreme Court has approved Crown Resorts’ shareholder class action settlement, plus a $19.9m contingency fee for Maurice Blackburn. Justice Nichols said the 27.75% group costs order was “comfortably” within range and reflected the firm’s risk in funding and prosecuting the case. The action alleged Crown misled investors over AML compliance, sparking an 8% share price drop in October 2020: Lawyerly

The QLD Supreme Court enforced a 12-month, 50km restraint against IVF specialist Dr Simone Campbell after she left City Fertility for rival Queensland Fertility Group just 2 weeks after terminating her contract. She claimed City Fertility underpaid cycle management fees and that this breach freed her to join rival Queensland Fertility Group. But the Court found the alleged $17k underpayment was really only $7k — too minor to justify termination. With no valid termination, the restraint stood. In fact, the Court found the restraint reasonable: most patients lived within 50km of City Fertility’s Brisbane clinics, relationships typically lasted years, and the 12-month limit gave the clinic time to replace Dr Campbell and redistribute patients. The Court granted an injunction, barring her from practising within 50km of City Fertility clinics for 12 months - an unusual result given restraints are rarely enforced: Hall & Wilcox

With no AI-specific laws in Australia, regulators are leaning on the ACL and existing regimes to target businesses that exaggerate their AI or cyber credentials. Misleading claims, like overstating chatbot capability or downplaying cyber risks, can attract penalties of up to $50m or 30% of turnover. ASIC and the ACCC have warned AI-washing will be treated like greenwashing. In the US, the SEC has charged investment advisors for exaggerating AI use, pursued a restaurant tech company whose “AI” product secretly required human input, and a securities class action is underway against an engineering firm accused of misleading investors about its AI capabilities. These cases signal the types of claims Australia may soon face: Corrs Chambers Westgarth

The NSW Supreme Court, has ruled employees could claim entitlements from the operating parent entity, despite contracts naming an assetless subsidiary. Black J found operating parent was the ‘true employer’, as it paid wages, held assets and controlled employment decisions. Under s 433(3)(c) and s 561 of the Corps Act, proceeds of circulating assets must first go to employee priority claims before secured creditors. The case reaffirms that courts will look at the substance of the employment relationship, not the contract label. Where a parent pays the costs and exercises control, it can be deemed the true employer: Corrs

The Full Federal Court has confirmed that a director of a trustee company can be personally liable if they intentionally cause the trustee to act in breach of trust and know facts that would signal a breach to a reasonable person. The Court rejected arguments that directors should be treated differently from other agents, clarifying there’s no shield for directors when inducing or assisting a trustee’s breach of trust. The ruling means directors can be exposed in equity for knowingly procuring, inducing, or assisting dishonest breaches, even when acting in their corporate capacity.