By Ross Kelly
LAW firm Slater and Gordon will take legal action against up to 100 financial planners on behalf of 2,000 investors who lost millions of dollars in schemes associated with the failed Westpoint Corporation.
Slater and Gordon partner Rob Lees confirmed in a press conference that it would pursue more than $200 million from financial planners in a series of court actions — both class and individual.
Lees said most of the targeted planners marketed Westpoint through a network.
“It is no coincidence that in our interviews with clients the same names keep popping up,” he said.
The 2,000 clients to be represented by Slater and Gordon have suffered an average loss of $100,000 each.
“Many of our clients tell us that the Westpoint schemes were represented to them as safe and even ‘guaranteed’,” Lees said.
“In reality, the promissory notes they held from the special purpose vehicles … were the equivalent of unsecured second or third mortgages.”
Lees also claimed that many of the clients have complained that some financial planners did not disclose that they were receiving commissions, some as high as 10 per cent, for selling Westpoint mezzanine products.
“The risks associated with this type of capital raising were not properly explained. Despite assertions that this was a safe investment, it had no asset backing.”
All of the impending actions against financial planners will be funded by IMF Australia.
Slater and Gordon predicted that between 3,000 and 4,000 people lost money through Westpoint.
The Australian Securities andInvestments Commission also announced it was investigating financial planners associated with Westpoint.
