IMF to fund class action against Lehman Brothers
Litigation funder IMF has agreed to fund litigation by $1.2 billion class action on behalf of 600 small investors who lost funds in complex debt securities issued by Lehman Brothers Australia.
The class action also includes Australian local councils, charities, churches and universities that invested in the failed investment bank.
IMF has reportedly brought the action against Lehman Brothers for breaching its fiduciary duty by putting its own interests before those of its clients.
Meanwhile, IMF has also agreed to fund litigation by members of the Great Southern Cattle projects against companies within the Great Southern Group and various directors of those companies.
IMF’s agreement to fund legal action in the Western Australian Supreme Court is subject to enough members of the cattle projects participating in the litigation.
Great Southern, which managed 45 cattle and other schemes on behalf of 43,000 investors, called in administrators on May 16 after its cash flow dried up and it was unable to draw more support from its bankers.
Great Southern had liabilities of $996.4 million, including loans and borrowings of $833.9 million at April 30 this year.
On May 27, at a meeting of Great Southern creditors, some investors called for the administrators to investigate the wind-up of Great Southern's cattle projects.
These investors claimed the wind-up had left them with "worthless" Great Southern shares in exchange for their interests in the cattle projects.
Recommended for you
A Supreme Court of Western Australia jury has issued its verdict regarding unregistered MIS operator Chris Marco, who was on trial for 43 fraud charges, with ASIC stating the verdict ends a “sorry chapter”.
ASIC has released the results of the latest adviser exam, with August’s pass mark improving on the sitting from a year ago.
Financial advice practices may be hiring younger or professional year advisers as a succession option, but they may find they are unable to put up the capital if the adviser looks to retire.
Any changes to product labelling for sustainable funds must be applied consistently across investor channels, including those used by financial advisers, according to RIAA.
