$1b rides on Storm class suit
02-Jul-2010
$1b rides on Storm class suit
Anthony Marx - The Courier Mail
A LONG-anticipated class action against the Commonwealth Bank on behalf of more than 300 devastated Storm Financial investors was filed late yesterday in Federal Court in Sydney.
Lawyer Stewart Levitt said the claim could recover more than $1 billion for his clients, who had margin loans from the bank and were wiped out in the sharemarket collapse of late 2008.
The legal action, which includes former Storm staff, alleges the bank failed to issue margin calls that could have allowed clients to save their portfolios from a full selldown.
Mr Levitt will announce details of the case today in Brisbane with Queensland victims Sean McArdle and Les Sherwood.
Mr Levitt said actions were also pending against other banks, including Macquarie and NAB.
About 3000 Storm clients lost an estimated $3 billion, but more than 1000 have accepted a settlement offer from the Commonwealth Bank, which has acknowledged errors in its lending practices. Mr Levitt alleges the settlement, overseen by rival law firm Slater & Gordon, has short-changed investors.
The Commonwealth Bank said last night it was committed to the resolution scheme and would defend any legal challenge.
