A settlement has been reached between former Storm Financial clients and Macquarie Bank, which will see the bank pay $82.5 million.
The Federal Court of Australia approved the settlement, but ASIC has appealed the decision. Under the settlement, around 315 investors who funded the class action will be reimbursed their legal costs and compensated for approximately 42% of their losses (as estimated by Levitt Robinson) while around 735 Macquarie borrowers will only get back about 18% of their losses (as estimated by Levitt Robinson).
ASIC has questioned whether the distribution of the money is fair, because it is not in proportion to losses suffered. The appeal also questions whether:
A funders’ premium for class action members who funded the action amounts to an unfair advantage for those members at the expense of the remaining 70% of class action members, and;
Inadequate notice was given to class action members of the prospect of payment of a funders’ premium
ASIC deputy chairman Peter Kell said, “Settlement of a class action should be undertaken in the interests of the class action group as a whole. ASIC’s appeal raises the question whether this settlement was unfair to the 70% of class action members who did not, or were unable to, contribute to the funding of the action".
Earlier this year ASIC also entered into an agreement with CBA to make available up to $136m as compensation for losses suffered on investments made through Storm Financial. The $136m was in addition to payments of approximately $132m CBA has already provided to Storm investors under its CBA Resolution Scheme.