Charity sues over sub-prime losses
West Australian charity Senses Foundation has filed an application against financial advice company Counterpoint through law firm Slater & Gordon.
According to Slater & Gordon, Senses lost more than $1.5 million in Basis Capital Funds, which was linked to the US sub-prime market and collapsed during the GFC, after following the advice of former Counterpoint director Peter Williamson.
An application filed by Slater & Gordon in the Federal Court alleges Counterpoint failed in its duty of care and engaged in misleading and deceptive conduct between 2005 and 2007 while advising Senses.
Slater & Gordon commercial litigation practice group leader Mark Walter said Senses would never have placed the money with Counterpoint if it had been told that its investment in Basis Capital Funds was high risk and volatile.
"It wasn't informed of that and as a result, it suffered significant losses," he said.
"Counterpoint ought to have known that this was a completely unsuitable, high risk proposal for a charity, and that the money should have been invested in a more appropriate manner," he said.
Although Counterpoint merged with asset manager Grove Financial Services in 2008, Walter told Money Management that Counterpoint is a named party, that is still in operation, and can still be pursued from a legal perspective.
The case is being financially backed by litigation fund LCM.
AUTHOR
Chris Kennedy
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