Westpoint investors can recover losses through PI insurance
The NSW Supreme Court of Appeal has ruled that investors in failed property company Westpoint can recover their losses through professional indemnity (PI) insurance that was taken out by the financial planning group Quantum Securities.
Quantum took out PI insurance with QBE Australia.
Allegedly inappropriate advice to invest in Westpoint was provided by financial planner and Quantum authorised representative Andrew Chen. He advised clients to invest almost $6.9 million in Westpoint’s Bayshore and Mount Street development in Port Melbourne and North Sydney respectively.
Law firm Slater and Gordon launched a class action in 2007 on behalf of 59 investors in the failed property group who lost millions in investments in the two developments. The developments went into liquidation in December 2005.
QBE claimed in court that the PI insurance could not be used to cover the financial losses from this advice, however, the NSW Court of Appeal ruled that the PI insurance could be used to cover investors' losses if the class action was successful.
Ben Whitwell of Slater and Gordon said investors had jumped yet another hurdle to recover the money they lost from inappropriate financial advice.
Recommended for you
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.
In this episode of Relative Return, host Maja Garaca Djurdjevic speaks with Riley James, founder and chief executive of fintech SuperAPI, about creating a superannuation ecosystem and potential changes from the Quality of Advice Review.