Compo deal for BOQ customers caught up in Storm
BANK of Queensland customers caught up in the Storm Financial debacle will get about 45% of their loss suffered under a new $17 million compensation deal.
Storm Investors' Consumer Action Group chairman Mark Weir said he was cynical about the formula used in this BOQ agreement and a previous deal done with the Commonwealth Bank.
But he said anything put forward at this point was conjecture until the group had read the detail.
"I'm extremely cynical about the formula used by the Commonwealth and other banks in regards to assessing Storm losses," he said.
"It's creating a lot of despair among members because they've been led to believe compensation received from one quarter, for example, settlement from CBA - may determinately impact on anything you got from the other banks.
"Until such time as the ink is dry on the cheques we really don't know how it's going to address the despair and suffering those people suffered for five years."
Australia's corporate watchdog took legal action against BOQ, CBA and Macquarie in the wake of Storm Financial collapse, alleging the banks supported Storm's unregistered managed investment scheme.
The banks still deny the allegations but have all settled before a ruling was handed down.
The Australian Securities and Investments Commission has calculated investors lost about $830 million after Storm's collapse.
BOQ has agreed to settle legal action with a gross payment of $19.7m, including the $17 million for former Storm customers, and other case costs leading to a $22.1m hit to its accounts.
Following CBA compensation payments of up to $136m and Macquarie Bank of about $75m, the settlement with BOQ brings ASIC's existing litigation to obtain compensation for Storm investors to an end.
BOQ acting chief executive Jon Sutton said the bank would contact eligible customers about the compensation about an option to accept the settlement or remain on their current repayment plan.
"We are pleased to have reached a resolution to this long-running issue and will now work towards providing certainty to the customers who were involved," he said in a statement.
ASIC chairman Greg Medcraft said the watchdog preferred this settlement option to awaiting judgment in its proceedings and possible appeals.
ASIC will continue with its civil penalty proceedings against the founders of Storm, Emmanuel and Julie Cassimatis, for alleged breach of their directors' duties.
Class action solicitors, who did not return APN Newsdesk's call, will administer the compensation payments.
- APN NEWSDESK