Investors caught in the collapse of Storm Financial have been left in the dark about the progress of compensation payments from Commonwealth Bank of Australia (CBA) and ASIC, with a raft of new investor actions against banks in the wings, it has been claimed.
Storm Investors Consumer Action Group (SICAG) joint chairmen Mark Weir was unable to provide an update on the CBA resolution scheme or how many of the group’s investors had accepted offers, accusing the bank and its legal representative, Slater & Gordon, of washing its hands of the matter.
“The lack of information coming out of Slater & Gordon surrounding their intentions or activity is almost deafening at the moment in its absence,” Weir said.
“I really don’t know. Obviously you will be aware that the relationship between the SICAG committee and Slater & Gordon became dysfunctional some time ago and they are not volunteering to cooperate by providing information that would be in the best interests of their clients.
“We don’t know whether they have dusted off their hands.”
Slater & Gordon Brisbane group practice group leader Damian Scattini was also unable to provide an update on where the resolution stood.
“I’d have to check an update for you. I’m not doing it day-to-day. I think it’s getting towards the final furlongs,” Scattini said.
Despite not being able to provide an update on the scheme, he said his firm was working hard to settle a number of Storm investor cases.
“We’ve been settling cases with the NAB (National Australia Bank) and discussions with others with the NAB so that’s going along nicely there.
“[In terms of] ANZ we’re still finalising the terms of the resolution scheme. Bank of Queensland, we’re still in court.”
Fellow litigator Levitt Robinson Solicitors is also advanced in action on behalf of Storm clients against around 10 financial services entities.
“We have already scheduled several settlement conferences with the NAB and to date we have had a better experience with the NAB than with CBA regarding the banks’ attitude to negotiating settlements, without trying to restrict the kinds of legal principles to be considered when working towards deals,” Levitt Robinson Solicitors principal solicitor and advocate Stewart Levitt said.
Levitt said the firm would also work with ANZ over its planned resolution scheme.
The firm is due to return to court to continue its proceedings against CBA on 22 October.
Levitt Robinson has commenced discovery in regards to action against BT on behalf of Storm clients who obtained margin loans from BT.
The legal firm intends to bring individual cases to court for a number of Bank of Queensland clients.
Meanwhile, Macquarie Bank had dropped certain parts of its appeal against Sydney-barrister Ross Goodridge, Levitt said.
“The good news is that Macquarie Bank has dropped their appeal against the decision which [Justice] Rares made in Goodridge’s case on whether a margin call has to be made by written notice addressed to the customer,” he said.
“This is no longer an issue in the appeal. So it is established that a margin call does have to be made by written notice addressed to the customer.”
ASIC is yet to finalise its compensation discussions it began in July.
