Macquarie settles with Storm investors
Storm Financial investors who will receive the $82.5 million settlement from Macquarie Bank have acknowledged that there was no wrongdoing by the bank.
The settlement, which is yet to be approved by the Federal Court, was a result of legal proceedings brought against Macquarie by investors advised by Storm Financial, a dealer group which famously collapsed in 2009.
"This commercial settlement was reached having regard to the complex and unique features of the extensive litigation," the bank stated.
"As the settlement requires the approval of the Federal Court of Australia, and because there is other related litigation which remains ongoing, Macquarie will not be making any further comment."
In December 2008, the Australian Securities and Investments Commission (ASIC) launched an investigation into Storm Financial in connection with margin loans and related advice given to its clients.
At that time, there were 450 clients who owed their margin lender more than the value of their portfolios, equating to $30 million in total.
In March 2009, the Federal Court ordered the dealer group be placed into liquidation.
Almost two years later, ASIC announced legal action against Storm directors Emanuel and Julie Cassimatis, as well as margin loan providers Commonwealth Bank (CBA), Bank of Queensland and Macquarie Bank.
The proceedings against the three banks were "in relation to alleged breach of contract, contravention of the statutory prohibitions against unconscionable conduct and liability as linked credit providers of Storm under section 73 of the Trade Practices Act 1974," the regulator said.
ASIC has since either banned or accepted enforceable undertakings from numerous financial advisers who were connected to the scandal.
In September last year, CBA agreed to offer up to $136 million as compensation for losses suffered on investments made through Storm Financial Limited.
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