A settlement between the Commonwealth Bank of Australia (CBA) and the Australian Securities and Investments Commission (ASIC) has been welcomed by the Parliamentary Secretary to the Treasurer.
CBA has announced its decision to make available $136m as compensation for losses suffered on investments made through Storm Financial Limited – a move welcomed by Parliamentary Secretary to the Treasurer Bernie Ripoll.
As chair of the Parliamentary Joint Committee on Corporations and Financial Services, Ripoll’s inquiry into the collapse of Storm Financial has resulted in a settlement to resolve court proceedings brought against CBA by ASIC.
Ripoll voiced his satisfaction with the outcome in statement on his parliamentary website: "I am pleased that an agreement has been reached and that this matter didn't drag on through time consuming and expensive court proceedings.
"I have spoken to hundreds of Storm investors who have lost everything and had their lives put on hold as result of the collapse.
"This will go, in some way, to repairing the immense damage caused by the collapse of Storm."
The agreement between ASIC and CBA aims to ensure that each CBA investor who participates in the settlement will be compensated at a rate of approximately 55% of their total losses allocated to CBA under a model developed by ASIC.
The calculation accounts for previous compensation Storm investors have received from CBA under its earlier resolution scheme.
The latest compensation package will provide further benefits to Storm investors who borrowed from CBA, including: the writing off of any loan balances that remain in negative equity on their margin loan after compensation is applied to an investor’s outstanding Storm-related margin loan; and the writing off of moratorium interest for investors granted an interest payment moratorium by CBA.
While ASIC cannot offer legal advice, Storm investors who have questions about the settlement can visit ASIC’s Storm investor website, or call ASIC's Client Contact Centre on 1300 300 630 to request a printed copy of the information on the website.