Melbourne-based trustee company State Trustees has been ordered to pay $13.5 million in compensation to Westpoint investors.

The Australian Securities and Investments Commission (ASIC) has obtained Federal Court approval for the $13.5 million settlement, with State Trustees ordered to pay the amount by March 15.

A statement from ASIC said the settlement allows around 525 investors to take part, with the regulator indicating those eligible would recover just over 70 cents for every dollar they invested in the Mezzanine Notes issued by a Westpoint subsidiary.

The regulator commenced proceedings against State Trustees in 2008 alleging the trustee had failed to comply with its obligations under the Corporations Act and had breached its duty to the holders of the Mezzanine Notes. State Trustees has not admitted any liability.

It is the fourth settlement of ASIC's Westpoint proceedings to be approved by the Federal Court, following settlements with Masu Financial Management, Professional Investment Services and Bongiorno Financial Advisers.