Check a statement for the prohibition on false or misleading statements
Key facts
- Human involvement
- YellowClose supervision
- How AI is used
- Extract the statement or the information disseminated, whether it is said to be false in a material particular or materially misleading, and which of the subsection (1)(b) effects is alleged: inducing persons in this jurisdiction to apply for financial products, inducing them to dispose of or acquire financial products, or increasing, reducing, maintaining or stabilising the price for trading in financial products on a financial market operated in this jurisdiction. Record what the file says the person knew or whether the person is said not to have cared if the statement was true or false. Do not find the fault element. Do not say an offence has been committed.
- What the lawyer must review
- Decide whether section 1041E applies and whether there is a defence. A person must not, in this jurisdiction or elsewhere, make a statement or disseminate information if it is false in a material particular or materially misleading, it is likely to have one of the inducing or price effects in subsection (1)(b), and when it is made the person does not care whether it is true or false, or knows or ought reasonably to have known that it is false in a material particular or materially misleading. Failure is an offence under subsection 1311(1). The note points to defences in Division 4, which was not the text opened. It may also lead to civil liability under section 1041I. For an offence, paragraph (1)(a) takes its fault element from paragraph (1)(c), and strict liability applies to the three subparagraphs of (1)(b). Read Division 4 before advising that no defence is open. This is a different test from section 1041H.
- Written for / version
- US
Open a jurisdiction version of this task to see which instruments apply: US
Who does what
| Role | What they do |
|---|---|
| Assistance | Extract the statement or the information disseminated, whether it is said to be false in a material particular or materially misleading, and which of the subsection (1)(b) effects is alleged: inducing persons in this jurisdiction to apply for financial products, inducing them to dispose of or acquire financial products, or increasing, reducing, maintaining or stabilising the price for trading in financial products on a financial market operated in this jurisdiction. Record what the file says the person knew or whether the person is said not to have cared if the statement was true or false. Do not find the fault element. Do not say an offence has been committed. |
| Lawyer | Set the scope, supervise the work closely, verify every part relied on, resolve omissions and exceptions, and approve the exact output. |
Checklist
- Quote the statement. Record which subsection (1)(b) effect is in issue. Do not invent one.
- Do not find that the person knew, ought to have known, or did not care.
- Do not treat the strict-liability note on subsection (1)(b) as removing the fault element in subsection (1)(c).
- The lawyer reads the Division 4 defences before any advice that the prohibition applies.
Sources
- Corporations Act 2001 (Cth), section 1041E · 2026-10-22
These are suggested working checks. Confirm the required checking with the responsible lawyer before work starts; the checking approach does not establish permission to use AI.