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ISCOVER
Staff Reporter
While the Commonwealth Bank of Australia officially settled its Storm Financial litigation with ASIC last week, it seems there are still a few unhappy investors.
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Last Friday, ASIC’s chairman Greg Medcraft said CBA would make approximately $270 million available to many of its customers who invested through Storm.
While some were pleased with the result, a report in The Daily Telegraph said other investors were still keen to resolve the mess in court.
According to the paper, some of the investors were not happy with the compensation model ASIC designed, which ensures that every CBA investor will receive compensation of approximately 55 per cent of that part of their total loss.
Barrister Tony Morris QC, who is representing a number of victims, yesterday urged his clients to consider CBA's offer before deciding whether or not to push forward with legal proceedings.
According to Mr Morris, while a number of investors will see the deal as "attractive", many will find it appalling and want the class action that is currently underway to continue.
Speaking about the compensation deal last week, Greg Medcraft said it was a “timely, fair and certain outcome for Storm investors who borrowed from CBA”.
“ASIC's objective of obtaining compensation for Storm investors has been achieved today for CBA customers, without the need for a long, costly legal process that brings with it a level of uncertainty,” he said.
“Storm investors can be confident we would not have agreed to a settlement unless we thought the compensation was appropriate.
“ASIC recognises CBA's earlier Resolution Scheme was a constructive response by the bank to the hardship of its customers who invested through Storm. ASIC welcomes CBA's positive engagement in resolving this matter and its responsible approach in dealing with its customers.”
CBA’s group general counsel David Cohen agreed and said CBA was equally pleased to have “reached an agreement with ASIC on this matter as it is in the best interests of our customers to avoid lengthy and uncertain litigation”.
“This result delivers certainty to our customers who might otherwise have faced further years of delay before any final litigation result would have been known,” he said.
