2. December 2011 15:32
11-280AD ASIC reaches eighth Westpoint settlement
Friday 2 December 2011
ASIC has reached a settlement of its Federal Court proceeding against Queensland-based financial services firm, Strategic Joint Partners Pty Ltd (SJP).
The settlement concerns a claim for compensation on behalf of SJP clients (Group Members) who invested in the failed Westpoint Group of companies and is one of eight obtained by ASIC. If approved by the Court, SJP clients will receive over $1.39 million in compensation.
The settlement was reached without any admission of liability by SJP.
In March 2008, ASIC commenced proceedings against SJP following concerns the firm had been negligent and had breached the conditions of its Australian financial services licence in providing advice to its clients.
On 1 December 2011, the Court made orders for ASIC to communicate with all Group Members, providing details of the compensation they will likely receive and providing them with an opportunity to object to the settlement.
The process for approval of the settlement will include:
- writing to Group Members, providing details of the compensation they will receive and giving them the opportunity to lodge with the Court any objection to the settlement
- the Court considering the submissions of ASIC (and SJP) and any Group Member as to why the settlement should or should not be approved, and
- the distribution of compensation to Group Members by ASIC if the settlement is approved (following a period to allow for any appeals).
After Group Members have had time to consider their position, ASIC will file a further application seeking final Court approval of the settlement. The Court has agreed to hear the application for final approval on 23 December 2011.
The investors in Westpoint-related financial products had an outstanding total capital invested of $388 million as at January 2006 when the Group collapsed. Since November 2007, ASIC has launched 19 civil actions seeking to recover funds for investors in the majority of the Westpoint companies, including:
- a claim against KPMG, the former auditors of the Westpoint Group
- claims against the directors of nine Westpoint mezzanine companies and various entities associated with a director
- claims against seven financial planners, and
- a claim against State Trustees Limited.
To date, ASIC has successfully settled claims against: certain directors of the Westpoint group of companies and KPMG ($57 million); Masu Financial Management Pty Ltd; Professional Investment Services Pty Ltd ($5.9 million); Bongiorno Financial Advisers Pty Ltd and Bongiorno Financial Advisers (Aust) Ltd ($2.6 million); State Trustees Ltd ($13.5 million), Dukes Financial Services Pty Ltd and Joseph Dukes ($1 million) and Glenhurst Corporation Pty Ltd ($2.5 million).