ASIC launches more civil action on Westpoint
In a week during which the regulator initiated criminal charges against the former controller of Westpoint, the Australian Securities and Investments Commission (ASIC) has now launched civil proceedings on behalf of Westpoint investors against advisory company Brighton Hall Securities.
The action against Brighton Hall Securities comes less than a month after dealer group Professional Investment Services (PIS) settled a class action initiated by ASIC relating to the Westpoint collapse.
The PIS settlement, which was subject to approval by the Federal Court, will result in compensation being paid by PIS to clients affected by the Westpoint investment, although PIS admitted no liability.
ASIC said it would be alleging in the Federal Court in Perth that Brighton Hall Securities was negligent in relation to its investigation of Westpoint products and its subsequent recommendations to its clients to invest in Westpoint products.
It said its proposed claim against the company would seek to recover compensation in the order of $14 million but acknowledged that given Brighton Hall was in liquidation, it anticipated that the funds available to satisfy the claim would be limited to any available insurance proceeds.
ASIC said around 170 investors could benefit from the litigation, which was being initiated under section 50 of the ASIC Act, which enables the regulator to begin and carry out civil proceedings for damages for investors where it appears that such proceedings are in the public interest.
The regulator said it filed for the action in the Federal Court following negotiations with the relevant parties aimed at preventing the need to commence such litigation.
AUTHOR
Mike Taylor
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