Storm class action deadline looms
WANTED: Investors caught up in the Storm Financial collapse.
The deadline to get involved in the class action against the banks involved with Storm Financial is Thursday.
But the Storm Investors Consumer Action Group is sure it could convince Sydney-based law firm Levitt Robinson, which is running the class action, to extend the deadline if investors make themselves known to the group urgently.
The group - formed in 2009 after a large number of investors lost their life savings - wants to catch any investors who have fallen through the net before time runs out.
Group chairman Mark Weir said he was concerned, despite the group's best efforts, there were many investors who had not come forward to join the effort to restore their lost assets.
"Regrettably, we did not have the benefit of a database to assist our initial efforts to organise the investors group," he said.
"Although we succeeded in identifying the majority through these sources, we believe there remain many, who for one reason or another, possibly through a misplaced feeling of embarrassment or simply not having the emotional energy to do what is necessary, have not come forward."
Co-chairman Noel O'Brien said there might be people who had concluded that they did not have the financial resources necessary to fund themselves into a legal stoush with the banking industry.
But Mr Weir said the larger the class action group, the less legal fees individual clients would pay.
"For those investors who fear that they cannot afford to engage a lawyer, they need to be aware that one of the benefits of a class action is that the costs are shared by the group," he said..
"We also understand (Stewart) Levitt is exploring an innovative funding facility for those who have limited liquidity, to enable them to participate in this effort to recover their lost assets."
The SICAG chairmen said the resolution scheme established between law firm Slater and Gordon and the Commonwealth Bank was all but completed and the opportunity for Storm investors to obtain relief from that action had now passed.
But many disillusioned investors deserted the resolution scheme and chose to roll the dice with litigation through a class action with Levitt Robinson.
Preliminary directions hearings have been playing out in the Federal Court since early 2011 to the plea the Storm investment model - involving the Commonwealth, Bank of Queensland and Macquarie banks - was illegal because it represented a managed investment scheme that should have been registered with the Australian Securities and Investment Commission.
The trial is set to begin in Brisbane on September 10.
Mr Weir said ASIC had made an enormous effort to leave no stone unturned in gathering evidence.
"We believe (this) will give their case every chance of success," he said.
"It is also apparent that a healthy alliance has been established between the Levitt legal team and ASIC.
"It is not unreasonable to conclude this will translate into some reciprocal benefit for investors in so much as a successful determination from the courts on behalf of one party, will have some flow on to the other."
Mr Levitt has also foreshadowed a similar action against Westpac which Mr Weir said had claimed an internal investigation showed its exposure to the Storm events was "different" to the other banks.