ASIC wraps up Westpoint actions

The last of 19 civil actions brought by the Australian Securities and Investments Commission (ASIC) against financial services licensees recommending Westpoint products has wrapped up, with almost $1.5 million being recovered in this matter.

The regulator sought damages on behalf of 201 former investors in the Westpoint Group against Brighton Hall Securities, which was now in liquidation, with the Federal Court in Perth dismissing the proceedings on 7 March.

The Westpoint Corporation collapsed in late 2005, owing 3,000 – 4,000 investors $388 million, stemming from money raised by a property-related scheme it ran that issued unsecured promissory notes promising investors returns of up to 12 per cent p.a.

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ASIC brought the matter after Brighton Securities’ liquidator completed the distribution of entitlements arising from claims against the insurance money it had recovered under section 562 of the Corporations Act.

The final dividend represented a return of 22.35 cents on the dollar on the investors’ claims for $6,652,702.

The recovered funds from this claim bring the total damages received across the 19 actions against Westpoint Group to $160 to $170 million, split between $78.5 million in recoveries from the liquidation process and nearly $93 million in compensation from ASIC’s actions.

The actions were brought against Westpoint-related companies and their officers, the Westpoint auditor, and financial services licensees whose advisers recommended Westpoint products.

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