This article is from the Australian Property Journal archive
THE Australian Securities and Investments Commission has reached two more settlements in the Westpoint class action, recouping over $15 million for investors.
ASIC has reached an agreement to settle a class action against Melbourne-based trustee company, State Trustees Ltd (State Trustees) for $13.5 million. The settlement is subject to the approval of the Court.
The class action relates to investments made in mezzanine notes issued by Market Street Mezzanine Ltd (Market Street Mezzanine Notes), a company in the failed Westpoint group.
The settlement with State Trustees, if approved by the Court, will result in compensation being paid to approximately 525 eligible investors. The settlement was reached without any admission of liability by State Trustees.
And in another case, the Federal Court approved the settlement of a compensation claim against Bongiorno Financial Advisers Pty Ltd and Bongiorno Financial Advisers (Aust) Ltd clients who were advised to invest in York Street Mezzanine Pty Ltd.
As a result of the settlement, Bongiorno must pay the eligible investors a total of $2.55 million. Investors will ultimately recover between approximately 43% and 62% of their invested capital in York Street.
ASIC said the settlements result from the global mediation initiated by ASIC to resolve the litigation commenced by it seeking compensation on behalf of Westpoint investors.
So far, ASIC has reached settlements with Masu Financial Management Pty Ltd (MR 08-217), Professional Investment Services Pty Ltd (09-173AD).
Since November 2007, ASIC has commenced 19 civil actions seeking to recover funds for investors in the majority of the Westpoint companies, including:
· a claim against KPMG, the former auditors of the Westpoint Group;
· claims against the directors of nine Westpoint mezzanine companies, and various entities associated with a director;
· claims against seven financial planners; and
· a claim against State Trustees Limited.
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