CBA planners liable for $30 million loss
By Rebecca Evans
CommonwealthBank ofAustralia (CBA) owned dealer group Financial Wisdom has been found liable by the Victorian Supreme Court for negligent investment advice resulting in losses of around $30 million as part of a class action that concluded last week.
The court heard Financial Wisdom advisers had recommended a variety of investment schemes with the intention of offsetting these investments against tax, however, the Australian Taxation Office (ATO) rejected these deduction claims costing the investors millions of dollars.
Justice Philip Mandie handed down his judgement to the 11 test plaintiffs, awarding damages for loss of opportunity and for anxiety and stress, in addition to actual pecuniary losses.
“The evidence demonstrated that from 1997, with the collapse of Sentinel, until the present day, they had to grapple with the problems created by the loss of the assets that they looked forward to enjoying in retirement,” Mandie said.
One of these selected plaintiffs, Jillian Smith, spoke in her capacity as executrix of the will of her late husband Eric Smith.
“As a result of our investments through Sentinel we were left with very little financial security,” Smith said in her witness statement.
Justice Mandie set the total losses for Mr and Mrs Smith at around $1.2 million.
In his witness statement, investor Dale Newman said there were moments when he considered suicide and was teetering on the brink of a nervous breakdown.
“My all consuming desire for fairness and justice has enabled me to continue on,” Newman said.
Mandie will hear submissions for damages payouts at a later date.
Recommended for you
In this week’s episode of Relative Return Insider, AMP chief economist Shane Oliver joins the show to discuss Australia’s stagnating productivity ahead of the government’s economic reform roundtable, and how picking all the “low-hanging fruit” for reform in the ’90s helped kick off a surge that has since stalled out.
In this episode of Relative Return Insider, host Keith Ford is joined by Cyber Daily deputy editor David Hollingworth to take you inside the evolving landscape of cyber crime, how even huge companies can be at risk of breaches, and what that means for anyone trying to understand the risks.
The latest episode of Relative Return sees host Laura Dew chat with Richard Ivers and Mike Younger, co-portfolio managers at Prime Value Asset Management, on their newly launched Microcap Fund and opportunities in small and mid-cap shares.
In this week’s episode of Relative Return Insider, hosts Maja Garaca Djurdjevic and Keith Ford dive into the week's top news, from investors remaining blasé about tariff announcements to bitcoin surging and unemployment numbers.
