Close to 30 self-managed superannuation fund investors of failed financial services firm Trio Capital intend to lobby the federal government over financial compensation.
The investors, led by fellow investor John Telford, plan to hold the government, as well as other parties linked to Trio, to account with the formation of the Victims of Financial Fraud (VOFF) group.
"We intend to do the best we can to point out that we're really not satisfied with the justice that has been done . and we want compensation," Telford, who personally lost more than $600,000 in Trio, said.
As part of VOFF's first steps, the members have called a public meeting of investors for 24 March in Wollongong.
The meeting was an opportunity to firm up contacts of other victims of Trio's collapse, Telford said.
"We're all kind of cut off from each other. We can't approach the previous financial adviser [Ross Tarrant] and ask him for a [client] mailing list because that's confidential," he said.
"And we can't ask Mark McDonald [of Wollongong law firm Maguire and McInerney] for a mailing list because that's also confidential."
In 2010, McDonald commenced legal proceedings against Tarrants Financial Consultants on behalf of around 100 Tarrants clients, mostly from the Illawarra region.
Telford said one difficulty was that the client mailing lists over time had changed, in some instances significantly. He said in many cases, the investors were either too old or too financially destitute to continue their involvement.
"We know what we may win at the end of it in a professional negligence [case], which is only a little amount . and we've already nearly paid one-third of that in legal costs and the case hasn't even started," he said.
So it could easily swell to greater than what we will receive back."
Another difficulty is that after the courts found the failure of Trio involved fraud, a number of legal cases formed on behalf of investors and third-party help ceased.
"Now that fraud was proven, that barred [Macpherson + Kelley Lawyers] from chasing after any of the [research houses] or the banks, so that put an end to that," Telford said.
"[As] ASIC had barred Tarrant, that put an end to the [Financial Ombudsman Service] and the FPA from pursuing any further. So the case that they were already kind of establishing just fell to the wayside."
While VOFF members were frustrated with the government providing Australian Prudential Regulation Authority (APRA) superannuation fund investors with more than $50 million in compensation, the group was not seeking to sue the government, he said.
"We're not trying to start a court case to sue the government for doing something wrong, we're just putting it back [onto them] that they really have done something wrong [by not compensating all Trio investors]," he said.
"The people who are being compensated were doing exactly the same as people in the self-managed super funds."
When asked to comment on the government compensating only APRA-regulated funds, he said its reasoning could be equated to telling half of Australia's population who were drivers to drive through red lights and telling the other half they could drive through green lights.
"To have the two funds running adjacent and not to inform anybody that there were such underlying clauses that did not give you insurance if there was fraud - nobody who was in a SMSF knew that," he said.
In Telford's view, Australia's financial system regarding compensation payment needed to be changed.
"Of course the system needs to be corrected and fixed so that it doesn't happen to anybody else in Australia," he said.
"We're just the tip of the iceberg and it's going to happen again. But [the system] isn't our concern at the moment as we're not the experts."
The VOFF public meeting will be held on 24 March at the Pioneer Hall, Church Street, Wollongong, at 10am.
