More Storm action brewing
A law firm representing former clients of Storm Financial has foreshadowed legal proceedings against Macquarie Bank and Bank of Queensland, irrespective of any announcement released by the Australian Securities and Investments Commission (ASIC) with respect to agreements reached on behalf of Storm investors.
At the same time the law firm, Levitt Robinson Solicitors, has released 2007 documentation between ASIC and Storm Financial’s lawyers which suggests that the regulator held concerns about the financial planning company’s practices at that point in time.
The law firm has suggested that the document is sufficient to have clients ask themselves whether ASIC “let things go from November 2007 to December 2008 or even beyond”.
It claimed that in such circumstances clients needed to question whether ASIC could appropriately represent their interests in negotiating with the banks.
“We very much apprehend that we will need to negotiate on your behalf to attempt to cut a better deal for our clients, whatever is announced by ASIC,” the Levitt Robinson letter said.
The law firm’s correspondence also suggests that Storm clients found themselves “the victims of the banks’ urgent need to shore up their own positions” with respect to liquidity and margin loans.
“They had a liquidity crisis and your assets had to be liquidated to help them out,” the correspondence said.
The letter claims that, on such a basis, the law firm did not believe any action brought by ASIC against the banks would be fought without fear or favour.
AUTHOR
Mike Taylor
Recommended for you
The month of April enjoyed four back-to-back weeks of growth in financial adviser numbers, with this past week seeing a net rise of five.
ASIC has permanently banned a former Perth adviser after he made “materially misleading” statements to induce investors.
The Financial Services and Credit Panel has made a written order to a relevant provider after it gave advice regarding non-concessional contributions.
With the election taking place on Saturday (3 May), Adviser Ratings examines how the two major parties could shape the advice industry in the future.
