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
Recommended for you
In this episode of Relative Return, host Maja Garaca Djurdjevic is joined by shadow treasurer Angus Taylor to discuss the current state of the financial advice sector, the economy, the housing affordability crisis and more.
In this episode of Relative Return, host Laura Dew speaks with Andrew Mitchell, director and senior portfolio manager at Ophir Asset Management, about why he loves working in fund management and the lessons he’s learnt in a decade of running a firm.
In this episode of Relative Return, host Laura Dew speaks with Blackwattle Investment Partners managing director and chief investment officer, Michael Skinner, about setting up an asset manager and what he looks for in an investment team.
In this special episode of Relative Return, Momentum Media’s Phil Tarrant and Jordan Coleman discuss the publishing house’s expansion into greater coverage of the wealth management space.
