Storm lawyers eye legal challenge
LAWYERS acting for Storm Financial victims are considering a legal challenge against the 11th-hour deal Australia's corporate watchdog struck with the Commonwealth Bank.
Stewart Levitt, from Sydney law firm Levitt Robinson, said his legal team believed there could be "scope to challenge" whether the Australian Securities and Investment Commission had the authority to enter a compensation agreement with the nation's biggest bank.
He questioned whether the jointly sponsored $136 million resolution scheme was within the watchdog's charter.
Levitt Robinson's class actions against the three banks was expected to run alongside an ASIC trial alleging CBA, Macquarie Bank and Bank of Queensland supported Storm's unregistered managed investment scheme and were knowingly involved. The banks deny the allegations.
Mr Levitt said the CBA out-of-court settlement, which resulted in Justice John Reeves on Monday dismissing charges against the bank, would help shorten the length of the case in court.
He said ASIC had planned to take 10 out of 17 weeks presenting its case, with fears the case could blow out until March instead of its predicted December finish.
Mr Levitt said he anticipated saving time in court which meant he had more financial resources to increase the "fire power" of the legal team fighting the David versus Goliath battle.
Mr Levitt was speaking ahead of another public meeting at Redcliffe on Thursday night (Sep20) when he hoped to talk to investors involved in the class action about the legal, political and practical implications of ASIC's agreement with CBA on Storm.
He said he wanted to reinforce his continued commitment to bringing the banks to account, regardless of ASIC's decisions.
"We're undeterred and I believe they should be too," he said.
"I want to explain to them what is actually on offer (from CBA) and I believe they'll be less inclined to accept it."
Thousands of investors lost about $3 billion - the value of their portfolios at the peak of the market - when Storm collapsed in 2008.