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ASIC has welcomed a decision by Westpac to compensate more investors who came into contact with a former rogue home finance employee.
The regulator announced in March that ex-Westpac home finance manager David St Pierre had been permanently banned from engaging in credit activities and providing financial services.
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ASIC found that he “submitted loan applications to Westpac for approval when he knew that they contained false information and that they were supported by false documents”.
Mr St Pierre was employed by Westpac from 2000 to April 2011, with the offences occurring between July 2008 and June 2010.
During that time, he had involvement in providing loans to All About Property Development, the real estate arm of Capital Growth International Club. Both companies are now in liquidation.
Some of the 18 customers to whom the loan applications related were elderly or vulnerable and with limited financial means, according to ASIC.
Despite this, Mr St Pierre encouraged them to borrow against their homes, some of which were unencumbered, the regulator said.
The customers were then left “without sufficient income with which to repay their loans to Westpac” when the two firms were liquidated in February 2011.
A small number of customers who borrowed through have already been compensated by Westpac for the amounts they invested and their legal fees, according to ASIC.
The regulator said that as part of its ongoing investigations, it became aware of seven additional investors who did not borrow funds from Westpac but claimed to have had some direct contact with Mr St Pierre before making their investment in Capital Growth.
“ASIC welcomes Westpac's decision to make payment offers to these additional cash investors in response to the circumstances of the individual investors and the alleged dealings with Mr St Pierre,” it said.
“Westpac has provided investors the opportunity to receive independent legal advice regarding the offer made by Westpac.
“ASIC acknowledges Westpac's ongoing commitment to achieving a resolution for the benefit of Capital Growth investors.”
ASIC’s investigations into Capital Growth, its failure and its officers are ongoing.
[Related: Sydney broker convicted of $3.6m loan fraud]
