Federal Court of Australia

Australian Securities and Investments Commission v eToro Aus Capital Limited (No 2) [2025] FCA 904

ORDERS

THE COURT ORDERS THAT:

1. The defendant be granted leave to rely upon the Second Confidential Affidavit of Clarence Tan Guan Hong affirmed 5 May 2025 (including Confidential Exhibit CT-2) and the Affidavit of Samuel James Scerri affirmed 4 June 2025 (including Exhibit SJS-‍‍1) (Additional Evidence).

2. The defendant file and serve the Affidavit of Samuel James Scerri affirmed 4 June 2025, by 4.00pm on 8 August 2025.

3. The plaintiff file and serve any further evidence in reply to the Additional Evidence, by 15 September 2025.

4. Pursuant to s 37AI of the Federal Court of Australia Act 1976 (Cth) (FCA Act), from the date of this order:

(a) Exhibit CT-2 to the Second Confidential Affidavit of Clarence Tan Guan Hong;

(b) Exhibit SJS-1 to the Affidavit of Samuel James Scerri affirmed 4 June 2025; and

(c) Pages 23–27 inclusive of the Affidavit of McKenzie Moore affirmed 14 July 2025

(together, the Confidential Information) not be published or disclosed to or by any person or entity and not be disclosed in the open part of any Court transcript, and be restricted to:

(a) the parties;

(b) the parties’ legal representatives;

(c) the independent expert witnesses for the parties;

(d) the Mediator and necessary staff of the Mediator in respect of the Mediation due to be held between the parties;

(e) ASIC’s staff working in respect of this proceeding as notified in writing by the plaintiff to the defendant from time to time;

(f) the presiding judge; and

(g) necessary court staff.

5. Prior to the tender by any party of any original or copy of any document forming part of the Confidential Information, such documents be marked on each page with the words “Confidential Information for use in Court proceedings NSD 805 of 2023”.

6. Any original or copy of any document forming part of the Confidential Information that is admitted into evidence:

(a) be identified on any list of exhibits as such; and

(b) not be further copied or reproduced, by any means, including by electronic means or handwritten summary thereof.

7. In relation to the application for non-publication and non-disclosure orders under s 37AF of the FCA Act:

(a) The defendant file and serve written submissions in support of the application and any evidence on which it intends to rely by 4:00pm on 14 August 2025.

(b) The plaintiff file and serve written submissions in reply and any evidence on which it intends to rely by 4:00pm on 21 August 2025.

Note:    Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.

REASONS FOR JUDGMENT

STELLIOS J:

1 The defendant (eToro) seeks leave to rely on evidence served nearly six months after the time specified in orders made on 28 October 2024 (Interlocutory Application). That evidence is:

(1) A confidential affidavit of Clarence Tan Guan Hong affirmed on 5 May 2025 and its Exhibit CT-2 (Second Tan Affidavit); and

(2) An affidavit of Samuel James Scerri affirmed on 4 June 2025 and its annexures (Scerri Affidavit), including an expert report at Exhibit SJS-1 to that affidavit (Scerri Report)

(together, the Additional Evidence).

2 For the reasons that follow, I consider that leave should be granted.

Evidence

3 In support of its Interlocutory Application, eToro read and relied on two affidavits of McKenzie Moore, solicitor for eToro, affirmed on 14 July 2025 and 21 July 2025 respectively (together, the Moore Affidavits). In opposition to the Interlocutory Application, the plaintiff (ASIC) read and relied on the affidavit of Kerrie Yan Ma, a lawyer employed by ASIC, affirmed on 28 July 2025. There were no objections to any of the affidavits.

Background

Substantive proceeding and pleadings

4 The substantive proceeding is a civil penalty proceeding brought by ASIC against eToro for alleged contraventions of ss 994B(2) and 994E of the Corporations Act 2001 (Cth). Those provisions, in this proceeding, relate to retail product distribution in relation to a contract for difference financial product (CFD Product) without making a target market determination (TMD). It is alleged that determinations purportedly made by eToro did not satisfy ss 994B(5) and 994B(8) of the Act, and were not TMDs for the purpose of s 994A. ASIC further alleges that eToro failed to ensure financial services were provided efficiently, honestly and fairly, in contravention of s 912A of the Act. ASIC seeks declaratory and injunctive relief, as well as pecuniary penalties for the alleged contraventions.

5 Of particular relevance to this Interlocutory Application are two allegations made by ASIC in its Amended Statement of Claim (ASOC) (at [34]–[35], particulars omitted):

34.    During the Relevant Period, where a retail client traded in the CFD Product:

a.    there was a high degree of risk of losses;

b.    there was a high risk that a client may lose all of their investment;

c.    there was a high risk of a retail client losing money rapidly after acquiring the CFD Product, and the level of risk was further increased if the underlying instrument itself was volatile or high risk;

d.    the high degree of leverage offered in the CFD Product could work against the client;

e.    there was a high risk of margin requirements changing and, at times, very rapidly;

f.    there was a high risk that a retail client would lose money rapidly when trading the CFD Product due to leverage.

35.    During the Relevant Period, when a retail client traded the CFD Product with cryptocurrency as the underlying instrument (eToro Cryptocurrency CFD):

a.    the retail client was trading in an extremely high risk investment;

b.    in the alternative to sub-paragraph (a), the retail client was trading in a high risk investment;

c.    the prices of the eToro Cryptocurrency CFDs quoted to the retail client were derived from price feeds from cryptocurrency exchanges or cryptocurrency hedge counterparties;

d.    the retail client could be exposed to fast and large changes to the value of their trading position and to their account with eToro, potentially triggering the need for more margin to be paid by that client, including at short or no notice;

e.    there was a risk of possible delays in closing out a trade due to underlying illiquidity, or volatility or early close out due to the underlying cryptocurrency;

f.    the prices available for cryptocurrencies could fluctuate significantly on any given day and over time, so that the pricing of the eToro Cryptocurrency CFDs could also fluctuate significantly and as often;

g.    there was no regulated market for cryptocurrencies, and this affected the pricing, liquidity and integrity of the markets and any exchange used for dealing in the cryptocurrencies which were the underlying instruments (where exchanges offering pricing for cryptocurrencies had little or no regulation or protections for users of them, affecting the pricing, liquidity and cost of transactions in cryptocurrencies, and correspondingly affecting the pricing of eToro Cryptocurrency CFDs);

h.    cryptocurrencies relied upon technology inherent in the software for the cryptocurrency, nodes and mining of cryptocurrencies, none of which were regulated or backed by any government or voluntary institution, so there were additional risks inherent in cryptocurrencies, and their predictability was much more uncertain;

i.    it was possible that some cryptocurrencies may become worthless, leading to a retail client’s eToro Cryptocurrency CFDs becoming worthless;

j.    under certain market conditions, the retail client might find it difficult or impossible to liquidate a CFD position, for example, when the market reached a daily price fluctuation limit and there is insufficient liquidity in the market;

k.    if the market moved against the retail client’s position, they might be called upon by eToro to provide a substantial amount of additional margin, on short notice, in order to maintain their position, and if they did not provide the required funds within the time required by eToro, their position might be liquidated at a loss;

l.    eToro allowed trading in eToro Cryptocurrency CFDs over the weekend, and where cryptocurrency exchanges might operate over weekends, there could be a significant difference between Friday’s close and Sunday’s open prices of eToro Cryptocurrency CFDs, which might result in not completing an order on a specific trading day or completing an order on a substantially less favourable price.

Procedural history

6 On 28 October 2024, by consent of the parties, Nicholas J made orders timetabling the filing and serving of evidence. Relevantly, Order 2 of those orders extended the time for eToro to file and serve any lay and expert affidavit evidence in response to ASIC’s evidence-in-chief to 9 December 2024.

7 On 12 December 2024, following the filing of evidence, Nicholas J made further orders timetabling a statement of agreed facts, a statement of facts and issues of law in contention, discovery, and expert conclaves between expert witnesses identified by both parties (amongst other matters). Various extensions of time have since been granted by the Court to the parties.

8 At a case management hearing before me on 6 March 2025 (with orders made on 7 March 2025), the matter was listed for a hearing estimated for 10 days from 20 October 2025, with an additional two days in December 2025. In the course of making submissions regarding an appropriate timetable for discovery and listing a hearing date, senior counsel for eToro shared an aide-memoire that stated “eToro considers it appropriate and consistent with the Court’s overarching principles to adduce further evidence from a forensic expert to provide the Court with the key statistical propositions arising out of the voluminous data exhibited”.

9 Consistent with the orders of Nicholas J on 12 December 2024 (as varied), Wesley McMaster and Paul Green (Financial Planning Experts) and Dr Elvis Jarnecic and Matthew Wilson (Derivative Experts) engaged in expert conclave conferences. They produced two joint reports:

(1) the Financial Planning Expert Report dated 12 June 2025 (served on the parties on 16 June 2025); and

(2) the Derivative Expert Report dated 30 June 2025 (served on the parties on 3 July 2025)

(together, the Expert Reports).

10 Amongst other matters, the Expert Reports sought to assess the level of risk associated with eToro’s CFD Product.

eToro’s activities in the intervening period

11 eToro’s evidence filed within time included the confidential affidavit of Clarence Tan affirmed 9 December 2024 (First Tan Affidavit) and confidential Exhibit CT-1 containing various data files, the confidential affidavit of Tracy Byrne affirmed on 10 December 2024, and the expert report of Paul Green sworn on 9 December 2024.

12 The Moore Affidavits explain what transpired after the filing of evidence in December 2024. In brief terms, between 10 December 2024 and mid-January 2025, Ms Byrne, the Head of Risk and Compliance for eToro, engaged with the data provided in Exhibit CT-1 to the First Tan Affidavit and determined that eToro did not possess the requisite software to analyse the volume of data in that exhibit.

13 On or around 30 January 2025, eToro acquired a new software product which would allow it to access and analyse the data in a manner that it considered was not as limited as the previous software. On or before 13 March 2025, Ms Byrne and eToro came to the conclusion that they did not have the requisite expertise, time, or resources to engage in the kind of data analysis they considered was required.

14 From 13 March 2025, eToro took steps to identify an appropriately accredited expert. On 27 March 2025, a decision was made to brief Mr Scerri and, on 5 May 2025, Mr Scerri received his final letter of instruction. The Scerri Report was provided to eToro on 4 June 2025 and shared with ASIC on the same day.

15 The Second Tan Affidavit including Exhibit CT-2, which was used to produce the Scerri Report, was served on ASIC on 12 May 2025. Exhibit CT-2 contained the same data as Exhibit CT-1, with the addition of data relating to time stamps of opening and closing CFD Product positions, individual transactions of client deposits and individual transactions of client withdrawals.

Principles

16 It was accepted by the parties that the applicable principles for leave to rely on late evidence were set out by Rofe J in Bed Bath ‘N’ Table Pty Ltd v Global Retail Brands Australia Pty Ltd [2022] FCA 1380 at [17]–[23]:

The principles set out by the High Court in Aon Risk Services Australia Limited v Australian National University (2009) 239 CLR 175 are directly applicable to the present application. In Aon, the plurality (at [111]), when considering the issue of granting leave to amend, said that the court’s discretion should:

... not be approached on the basis that a party is entitled to raise an arguable claim, subject to the payment of costs by way of compensation. There is no such entitlement. All matters relevant to the exercise of the power to permit amendment should be weighed. The fact of substantial delay and wasted costs, the concerns of case management, will assume importance on an application for leave to amend.

The plurality also emphasised (at [112]) that although parties have a right to bring proceedings and make choices as to how they frame their case, limits will be placed upon their ability to effect changes in their pleadings, particularly when, as in the case here, the proceedings are advanced. The plurality observed that in seeking the just resolution of the dispute, reference is made to parties having a sufficient opportunity to identify the issues they wish to agitate.

…

The need for a satisfactory explanation has been emphasised in cases applying Aon. In Solahart Industries Pty Ltd v Solar Shop Pty Ltd (No 1) [2010] FCA 1083; (2010) 88 IPR 337, Perram J refused an amendment application largely on the basis of the lack of any evidence of a satisfactory explanation.

…

Relevant factors to consider in determining whether to exercise the discretion were usefully summarised by Gleeson J in Tamaya Resources Limited (in liq) v Deloitte Touche Tohmatsu (A Firm), in the matter of Tamaya Resources Limited (in liq) [2015] FCA 1098 (Tamaya Resources); approved by the Full Court on appeal: Tamaya Resources Limited (in liq) v Deloitte Touche Tohmatsu (A Firm) [2016] FCAFC 2 at [125] (Gilmour, Perram and Beach JJ). Whilst these are expressed in terms of an amendment, they apply equally to the present case where leave is sought for late evidence. These factors are:

(1)     The nature and importance of the amendment to the party applying for it;

(2)     The extent of the delay and the costs associated with the amendment;

(3)     The prejudice that might be assumed to follow from the amendment, and that which is shown;

(4)     The explanation for any delay in applying for that leave;

(5)     The parties’ choices to date in the litigation and the consequences of those choices;

(6)     The detriment to other litigants in the Court; and

(7)     Potential loss of public confidence in the legal system which can arise where a court is seen to accede to applications made without adequate explanation or justification.

17 In approaching the application for leave, I have taken the following approach based on these principles. First, the discretion to grant leave must be exercised according to the Court’s overarching purpose to facilitate the just resolution of disputes according to law as quickly, inexpensively and efficiently as possible: Federal Court of Australia Act 1976 (Cth) (FCA Act) s 37M(1). Secondly, all relevant matters are to be weighed. Thirdly, the parties should have a sufficient opportunity to identify the issues they wish to agitate. Fourthly, notwithstanding the previous point, a party does not have an entitlement to rely on late evidence. Fifthly, delay in bringing an application for leave to rely on new evidence must be explained.

18 The parties’ submissions focused on delay, relevance, utility and prejudice.

submissions

Delay

19 I will start by explaining briefly why I do not consider that the acknowledged delay in bringing the application is a weighty consideration.

20 I accept the explanation for the lateness given in the Moore Affidavits. It is not necessary to outline that evidence in detail. It is enough to say that Ms Byrne had underestimated both the capacity of eToro’s data analysis tools and her own capacity to perform any analysis beyond what was deposed in her affidavit in December 2024. I accept that, following eToro’s acquisition of enhanced data tools in late January 2025, Ms Byrne realised that she had underestimated the challenges, time and resources needed to undertake further analysis. However, as Wigney J said in Clurname Pty Ltd v McGraw-Hill Financial, Inc [2017] FCA 1319 at [54], in the context of an application to amend pleadings:

The object of the Court is not to punish parties for mistakes made in the course of their case, but to correct errors with the result that a decision can be made on the real matters in controversy.

21 I recognise that eToro put ASIC and the Court on notice of the possibility of additional expert evidence in the aide memoire ahead of the case management hearing on 6 March 2025. I accept the evidence that the defendant was taking steps to identify and brief an expert between 13 March 2025 and 5 May 2025.

22 I also recognise that the Second Tan Affidavit was served on 12 May 2025 and the Scerri Report was served on 4 June 2025, the latter date being some four and a half months ahead of the date for the commencement of the hearing. I also accept that ASIC would have required time to assess whether to consent to the Additional Evidence, with a decision to object to the evidence being communicated on 3 July 2025.

23 Additionally, I do not consider that the circumstances are akin to those in Aon. There is still time before the hearing is scheduled to commence.

24 In my view, the delay has been explained, and, on balance, I do not consider that the delay in bringing the application is a weighty consideration militating against granting leave. In any event, delay was not a point pressed strenuously by ASIC.

25 The most pressing considerations relate to relevance, utility and prejudice.

Relevance and utility

26 ASIC contested both the relevance and utility of the Additional Evidence. I have included under this heading the nature and importance of the Additional Evidence to eToro.

27 eToro made the following submissions:

(1) The new evidence in the Second Tan Affidavit comprises data recording the deposit and withdrawal activities of eToro’s clients during the relevant period. It was contended that the evidence completes the data comprised in the First Tan Affidavit. In circumstances where ASIC has not engaged with the First Tan Affidavit, there is no good reason for ASIC to oppose the grant of leave.

(2) The majority of the underlying data was in Exhibit CT-1 to the First Tan Affidavit, and only supplemented by the data in Exhibit CT-2 to the Second Tan Affidavit.

(3) Paragraphs [34] and [35] of the ASOC allege that eToro’s products gave rise to certain risks “[d]uring the relevant period”. eToro’s pleaded case:

(a) in relation to the alleged risks at [34] of the ASOC, includes that the existence, nature and materiality of those risks are to be assessed by reference to the actual CFD Product, the client making the trade, and the individual point(s) in time in question, and not merely by reference to the contents of a Product Disclosure Statement (PDS); and

(b) in relation to the alleged risks at [35] of the ASOC, is that the materiality of those risks cannot be, as a matter of fact, generalised by reference to statements made in the PDS.

In short, the alleged risks in those paragraphs of the ASOC must be assessed in the real world by reference to actual clients and in a way that involves an empirical assessment with observable data.

(4) The Scerri Report will significantly assist the Court’s resolution of the issue of the alleged risks and their materiality, as illustrated by two examples:

(a) The Scerri Report states that 10% of customers contributed 77.68% of all deposited funds, and the median loss for all was US$31.01. In response to the alleged risks, eToro would like to put before the Court evidence that the median loss was a de minimus loss of US$31.01.

(b) A “survival analysis” shows that 64% of clients did not lose more than US$250 after a month of trading. This responds to the pleaded allegation in [34(b)] of the ASOC that there is a high risk that a client may lose all of their investment.

(5) Paragraph [44] of the ASOC alleges that eToro’s clients made certain overall losses during a particular period. While it is unclear to eToro how ASIC intended to use that allegation at trial, the Scerri analysis would provide a more granular perspective about what those losses meant for individual clients.

(6) ASIC also alleges that eToro’s actions, including the use of its screening tests, contravened s 994E(1) of the Act which provides that “[a] person who makes a target market determination … must take reasonable steps that will, or are reasonably likely to, result in retail product distribution conduct in relation to the product … being consistent with the determination”. Part of eToro’s response to that allegation will be pointing to the experience of real-life traders who were not losing vast sums of money.

(7) In the event of a finding of contravention, the real-world understanding of harms to consumers will be relevant to relief from liability under ss 1317 and 1318 of the Act.

(8) These questions of relevance should be determined at trial — not by way of a preliminary ruling.

28 ASIC submitted that:

(1) The Scerri Report is not relevant (or of marginal relevance) to the alleged contraventions, because:

(a) eToro was required to make a TMD before any person engaged in retail product distribution conduct in relation to the product (s 994B(2)).

(b) It is alleged that eToro contravened ss 994B(5)(b) and 994B(8)(b) of the Act in relation to each of the four purported TMDs, and:

(i) Section 994B(5)(b) requires that a TMD describe the class of retail clients that comprises the target market for the product. The requisite assessment is undertaken on the face of the TMDs.

(ii) Section 994B(8)(b) requires that a TMD be such that it would be reasonable to conclude that, if the product were to be issued, or sold in a regulated sale to a retail client in the target market, it would likely be consistent with the likely objectives, financial situation and needs of the retail client.  The requisite assessment is an objective one and forward-looking before the relevant product distribution occurs, not on the basis of information about what happened afterwards.

(c) In relation to the alleged contravention of s 994E of the Act, contrary to eToro’s submission, it has been accepted by this Court in Australian Securities and Investments Commission v Firstmac Pty Ltd [2024] FCA 373 that the reasonable steps must occur before the relevant retail product distribution conduct occurred.

(d) Each of the four TMDs covered a defined period of time and:

(i) the question of risk was not central to the identification of the target market for the first two TMDs; and

(ii) the third TMD had a possible negative outcome listed as “a high risk that a client may lose all of their investment”.

In relation to these TMDs, even assuming eToro’s contention that the alleged risks must be assessed empirically by observable data, the data the subject of the Scerri Report was not observable at the time each TMD was made. That is, the data model that Mr Scerri was requested to build related to answers submitted by eToro customers and their experiences in the whole of the relevant period; the data with which he was briefed related to the whole of the relevant period; and the “Client Cohorts” on which Mr Scerri was briefed to report were not defined according to the TMD periods. Mr Scerri completed the report according to his instructions; he analysed and reported on the data and trends across the whole of the period. Nowhere does he identify or analyse the data available to eToro at the time each TMD was made. Accordingly, the resulting report can have no bearing on the requisite enquiries under ss 994B(5)(b) and 994B(8)(b).

(e) Similarly, the examples provided by eToro at [27(4)] above involve data and analysis that span the whole of the relevant period, without distinguishing the TMD periods.

(2) As to a lack of utility, the Scerri Report:

(a) excludes the top 4.3% of clients by deposit size, consequently omitting 4,622 clients and their transactions; and

(b) does not advance eToro’s case as to the risk level of the CFD Products in any substantial way. Mr Scerri had been instructed with assumptions or statistical propositions which were, in substantial part, consistent with those provided to Mr Green for the purposes of preparing his report. And, on the basis of those assumptions, Mr Green agreed in the Financial Planning Expert Report that the eToro CFD Products “are high risk”. While eToro points to two examples of matters that go beyond Mr Green’s assumption, those are matters that go to quantum of loss and penalty rather than liability.

29 At the hearing, by way of response to ASIC’s written and oral submissions, eToro submitted:

(1) ASIC had not addressed the relevance of the Scerri Report to the allegations in the paragraphs [34] and [35] (and also paragraph [36]) of the ASOC. Those pleadings relate to the whole of the relevant period and do not depend on what eToro knew or what the risk profile was based on the data available to it at the time of the TMDs. Unless ASIC were to withdraw those allegations of risk identified as arising “[d]uring the relevant period”, then there is a dispute between the parties about the alleged risks during the whole period.

(2) Even if the requisite enquiry under the relevant provisions is forward-looking, that enquiry can be informed by evidence about whether the steps taken have worked. The decision in Firstmac does not suggest otherwise.

(3) In terms of utility:

(a) Mr Scerri’s evidence is important because the assumptions with which Mr Green was instructed were, in some respects, not quite right. At least to that extent, the report has utility.

(b) The language of “high risk” used in the Financial Planning Expert Report conceals what can be revealed by the real-world assessment undertaken in the Scerri Report.

(4) The Second Tan Affidavit contained all of the data, including in relation to the 4,662 clients omitted from the Scerri Report. ASIC may choose to use the complete data to have a responsive report prepared or use it to cross-examine Mr Scerri. However, those are matters for the trial.

Prejudice

30 It is convenient to start by outlining ASIC’s submissions regarding prejudice if leave were granted:

(1) The Scerri Report is likely to compromise the utility and finality of the expert conclave between the Derivate Experts. Dr Jarnecic and Mr Wilson were instructed to address questions directed to the risks faced by, and overall level of risk to, a retail client when acquiring or selling the CFD Product, and any factors that may impact the level of risk.

(2) eToro is now suggesting that the data underpinning Mr Green’s assumptions was incomplete. That, in turn, will compromise the utility and finality of the Financial Planning Experts’ conclave and report.

(3) ASIC would incur substantial cost and expense in responding to Mr Scerri’s evidence.

(4) Whether ASIC decides to put on further expert evidence in response to Mr Scerri will depend on what the existing experts have to say in response to his report. It is possible that an expert will say that Mr Scerri’s evidence is unremarkable.

(5) eToro has yet to identify whether it will put the Scerri Report to the existing experts or whether it proposes to ask any further questions of them. Nor has it indicated whether it proposes to make any submission that the conclusions and opinions in the Expert Reports, particularly Mr Green’s concession that the CFD Products are high risk, are in any way undermined or qualified by Mr Scerri’s findings. In short, it is unclear how eToro proposes to deploy the Scerri Report.

31 eToro submitted that:

(1) ASIC will not suffer any prejudice because it would have the opportunity to respond. ASIC confirmed that it is able to respond to the evidence in time for the hearing.

(2) ASIC indicated in oral submissions that it intends to brief an expert, the implication being that it has not done anything about the Scerri Report in the two months since the Scerri Report was served. It is yet to determine whether it takes issue with the findings of the Scerri Report.

(3) Any prejudice is a consequence of ASIC’s inaction since being served with the Scerri Report.

(4) There will be no material impact on the existing Expert Reports, given that:

(a) ASIC has produced no evidence from its experts that their reports would need to be reconsidered.

(b) ASIC has not engaged with either the First Tan Affidavit or the expert evidence of Ms Byrne. Neither of ASIC’s experts were briefed with that evidence. It should not be assumed that ASIC will seek to engage an expert to address Mr Scerri’s evidence.

(c) It is not apparent how the Derivative Expert Report would be affected.

(d) The assumptions in relation to which the Financial Planning Experts were instructed were substantially consistent with Mr Scerri’s brief. A table prepared by eToro showed minor differences, if not consistency, between the assumptions underlying the Scerri Report compared with the Financial Planning Expert Report.

(e) Even if the experts have to reconvene and supplement their original reports, there is ample time before the hearing. In any event, that is a consequence of ASIC’s delay in determining whether the evidence should be admitted. The Scerri Report was served on ASIC on 4 June 2025. The Expert Reports were completed on 12 and 30 June 2025.

(5) Contrary to ASIC’s submissions, the only real potential for prejudice would arise if the Scerri Report were not admitted. eToro would be forced to defend a civil penalty proceeding on the basis of incomplete evidence about the way that the CFD Product is used by clients in the real world.

DISPOSITION

32 For the following reasons, leave should be granted for eToro to rely on the Additional Evidence.

33 First, ASIC’s submissions have not excluded the possibility that the Additional Evidence has probative value.

34 ASIC’s opposition to the Additional Evidence focused primarily on the Scerri Report. Even if, as ASIC submitted, the data and analysis in the Scerri Report deals with the whole of the relevant period rather than the defined periods of the TMDs for the purposes of analysis under ss 994B(5)(b) and 994B(8)(b), eToro submitted that the allegations in paragraphs [34] and [35] (and perhaps also [36]) of the ASOC concern the whole of the relevant period. If that is the case (and no argument was put by ASIC against that proposition), then the Scerri Report, which is claimed to focus on the real-world experience of eToro’s clients, might be of probative value to those alleged risks. Claimed shortcomings, including the exclusion of 4,622 clients, may provide a basis on which to challenge the strength and weight of that evidence — but those are matters that can be pursued at the hearing.

35 Furthermore, the Scerri Report may be of probative value in determining the allegation that eToro has contravened s 994E of the Act. It might turn out to be the case that Firstmac precludes the use of data in relation to circumstances arising after the relevant retail product distribution occurred. However, that is not a matter that should be determined on this Interlocutory Application. That too is a matter for the hearing.

36 Accordingly, I am persuaded by eToro that the Scerri Report could conceivably be of probative value. Whether that is in fact so, and to what extent, are matters that should be left for the hearing.

37 Secondly, there was some tension in the way that eToro presented its arguments on the question of the utility of the Additional Evidence. On the one hand, it argued that the underlying assumptions and statistical propositions were substantially the same for the Financial Planning Expert Report and the Scerri Report. On the other hand, it submitted that the assumptions with which Mr Green was instructed were “not quite right”.

38 The difficulty with assessing utility is that the parameters for the assessment are yet to be established. It is, at this point, unclear whether ASIC will seek to engage with or challenge the evidence, and what steps eToro will then take. As senior counsel for ASIC conceded, it might turn out that Mr Scerri’s evidence is unremarkable.

39 In those circumstances, I do not consider that utility is a factor that weighs heavily in the mix one way or the other.

40 Thirdly, for similar reasons, it is difficult to assess the prejudice that admitting the Additional Evidence would cause. Certainly, the prejudice to ASIC appears minimal given that, as it conceded, it could respond to the Scerri Report. However, it is unclear what impact the Scerri Report will have on the Expert Reports.

41 It is regrettable that the conclaves have completed their task and produced joint reports before leave has been sought to rely on the Additional Evidence. However, I accept eToro’s submission that there is time for a supplementary conference to take place and report to be prepared before the commencement of the hearing. It is not unreasonable to expect that the parties will work attentively and diligently to achieve those outcomes before the hearing begins.

42 Fourthly, I am reassured in my conclusion by the nature of the proceeding. A proceeding for civil penalties is no ordinary civil proceeding. While its purpose is deterrence, not punishment, it remains a proceeding instituted by a regulatory agency of the state for a pecuniary penalty. It is in the interests of justice that the defendants to such proceedings be afforded a reasonable opportunity to contest the allegations against them and present evidence to make out their defence.

43 In summary, I am satisfied that eToro should be given leave to rely on the Additional Evidence.

Orders sought under s 37AF of the FCA Act

44 In the event that leave were given to rely on the Additional Evidence, eToro also sought non-publication and non-disclosure orders under s 37AF of the FCA Act in relation to Exhibit CT-2 to the Second Tan Affidavit and Exhibit SJS-1 to the Scerri Affidavit.

45 I made orders in this proceeding under s 37AF on 20 February 2025 (Australian Securities and Investments Commission v eToro Aus Capital Limited [2025] FCA 100 (ASIC v eToro)) in relation to paragraphs of the confidential affidavit of Tracy Byrne affirmed on 10 December 2024, paragraphs of and Annexure PG-1 to the affidavit of Paul Green sworn on 9 December 2024, and the whole of Exhibit CT-1.

46 In her affidavit affirmed on 14 July 2025, Ms Moore deposed on information and belief that the disclosure or public dissemination of Exhibits CT-2 and SJS-1 would likely prejudice eToro’s commercial interests. The present application for s 37AF orders is sought in relation to that new evidence for the same reasons advanced by eToro in support of the earlier orders made on 20 February 2025.

47 At the hearing, senior counsel for eToro indicated that it would not be necessary to make an interim order under s 37AI pending the determination of the application under s 37AF, provided that no access was permitted to that material in the meantime. Given that the s 37AF application has been made, and given my earlier reasons in ASIC v eToro, I nevertheless consider it appropriate to make an interim order under s 37AI in relation to the Additional Evidence. Since the application under s 37AF was not adequately dealt with in eToro’s submissions or ventilated during the hearing of the Interlocutory Application, timetabling orders will also be made for any additional evidence and submissions from the parties on that application.

Associate:

Dated:    7 August 2025