CBA reported to be seeking settlements with Storm Financial clients
The Sydney Morning Herald (SMH) is reporting that the Commonwealth Bank of Australia (CBA) is negotiating confidential settlements with clients it shares with Storm Financial.
The report states that the bank is trying to head off legal action over its alleged role in the collapse of the financial planning group and the effect the advice given by the group, and its eventual collapse, has had on its client base.
The article quotes the CBA as saying it has a team negotiating “rearrangements” with the Storm clients, while it also says the bank may be settling outstanding margin loans owed by Storm clients for a reduced sum.
But the article goes on to say that any deals struck by the clients will preclude them from taking further legal action against the bank. Hundreds of former Storm Financial clients are preparing legal action against various parties involved in the debacle, including CBA.
The article quotes a statement from the bank as saying that “it is appropriate that the bank is seeking appropriate legal arrangements with its customers to ensure that any rearrangements of facilities are final and conclusive, to allow all parties to move on”.
The article states the bank is making settlements on a case-by-case basis, and subject to confidentiality.
“The bank does not want other customers, whose circumstances may be different, gaining a mistaken view of what the bank might do in different circumstances,” the bank’s statement reportedly states.
Furthermore, the bank maintains that it is not “liable in any way in relation to the collapse of Storm or the effect of that collapse on ex-clients of Storm who are bank customers”.
Money Management approached CBA for confirmation of the information contained in the article, but the bank did not respond by the time of publishing.
CBA is also understood to be negotiating freezes on mortgages held by former Storm clients who cannot make their repayments.
AUTHOR
Mike Taylor
Recommended for you
After seven years at the company, Iress’ chief technology officer for wealth management APAC, Anthony Gerrits, has departed as the firm commences a search process to fill the role.
With advice firms thinking about scaling up in 2025, research has detailed the main avenues financial advisers say they have used for successful recruitment.
The board of Insignia Financial has reached a decision regarding the possible acquisition of the firm by US private equity giant Bain Capital.
Six of the seven listed financial advice licensees have reported positive share price growth in 2024, with AMP and Insignia successfully reversing earlier losses.
