Storm Financial/CBA resolution scheme questioned
Law firm Levitt Robinson has raised doubts about the adequacy of the compensation arrangements being negotiated between former Storm Financial clients and the Commonwealth Bank of Australia (CBA) through rival law firm Slater & Gordon.
Last week Slater & Gordon announced it had struck a deal that would see eligible Storm clients receive close to 90 per cent of the value of their share portfolio on the date they received a margin call. Clients would also have their home loans reassessed and then reduced if they had been inflated by CBA.
Levitt Robinson has responded by saying that the “deals that will be offered at this stage will be at the very bottom of the compensation calculations that could be awarded in a court of law”, and that it would seek more for its clients. Principal Stewart Levitt said that if the firm was unhappy with the outcome for its clients it would file class actions in the Federal Court against CBA and Macquarie.
The firm is holding meetings in Mackay and Redcliffe in Queensland (areas with high numbers of former Storm investors) tomorrow and Saturday, during which the firm said it would address the Slater & Gordon/CBA deal and discuss possible alternatives.
While CBA has culpability in its dealings with Storm Financial, other banks associated with the dealer group (such as the Bank of Queensland and Macquarie) do not. Levitt Robinson said the alternatives discussed at the Queensland meetings would apply to other banks as well as CBA.
Levitt Robinson said it currently represents more than 70 CBA borrowers who are also Storm clients and are participating in the CBA resolution scheme.
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.
