Stockbroking firmHartley Poyntonhas been ordered by the Victorian Supreme Court to pay $1 million in damages to a Perth taxi-driver who fought the stockbroker over the loss of $300,000 invested between 1997 and 1999.
Hartley Poynton is considering an appeal against the decision, according to a statement released to theAustralian Stock Exchangethis morning.
In what is a landmark ruling, Supreme Court Judge Thomas Smith said yesterday that the broker’s promise of low risk and returns of 15 to 20 per cent per month were “false, misleading and recklessly made”.
His judgement was handed down after the plaintiff Rahmat Ali mounted a legal case against Hartley Poynton from 1997 with solicitor Kimani Boden. The solicitor has since the delivery of the judgement compared the case to that of the fictional case in the filmThe Castle, where a ‘battler’ and small-scale solicitor won a case against a conglomerate in a similar struggle of ‘David and Goliath’ proportions.
“What we’re hoping is that mum and dad investors, as a result of this decision will have the opportunity to get some justice,” Boden told ABC Radio this morning.
Ted Rofe from the Australian Shareholders Association says the case should be noted by all stockbrokers.
“I think it also sends an important message to brokers that they need to know something about their clients and they need to make sure that they’re acting in the client’s interests, not their own,” he says.
Rofe says one of the problems was that Ali’s broker was encouraging him to trade for the purpose of generating commissions rather than to consider the client’s interest, and that there didn’t seem to be proper supervision by the firm of what individual advisers were doing.
Hartley Poynton secretary Greg Berth said in the statement issued to the ASX this morning:
“The prospect of an appeal against Justice Smith’s judgement in the Rahmat Ali case is an issue the firm’s insurers, their solicitors and their counsel are currently considering.”
