CBA planners liable for $30 million loss
By Rebecca Evans
CommonwealthBank ofAustralia (CBA) owned dealer group Financial Wisdom has been found liable by the Victorian Supreme Court for negligent investment advice resulting in losses of around $30 million as part of a class action that concluded last week.
The court heard Financial Wisdom advisers had recommended a variety of investment schemes with the intention of offsetting these investments against tax, however, the Australian Taxation Office (ATO) rejected these deduction claims costing the investors millions of dollars.
Justice Philip Mandie handed down his judgement to the 11 test plaintiffs, awarding damages for loss of opportunity and for anxiety and stress, in addition to actual pecuniary losses.
“The evidence demonstrated that from 1997, with the collapse of Sentinel, until the present day, they had to grapple with the problems created by the loss of the assets that they looked forward to enjoying in retirement,” Mandie said.
One of these selected plaintiffs, Jillian Smith, spoke in her capacity as executrix of the will of her late husband Eric Smith.
“As a result of our investments through Sentinel we were left with very little financial security,” Smith said in her witness statement.
Justice Mandie set the total losses for Mr and Mrs Smith at around $1.2 million.
In his witness statement, investor Dale Newman said there were moments when he considered suicide and was teetering on the brink of a nervous breakdown.
“My all consuming desire for fairness and justice has enabled me to continue on,” Newman said.
Mandie will hear submissions for damages payouts at a later date.
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