Parliamentary Secretary to the Treasurer, the Hon Bernie Ripoll MP, today welcomed the decision by the Commonwealth Bank of Australia(CBA) to make available $136 million as compensation for losses suffered on investments made through Storm Financial Limited (Receivers and Managers Appointed) (In Liquidation) as part of a settlement to resolve court proceedings brought against CBA by the Australian Securities and Investments Commission(ASIC).
Mr Ripoll, who as Chair of the Parliamentary Joint Committee on Corporations and Financial Services, conducted the inquiry into the collapse of Storm Financial, said he was pleased that CBA and ASIC had reached a settlement.
"I am pleased that an agreement has been reached and that this matter didn't drag on through time consuming and expensive court proceedings," Mr Ripoll said.
"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 has the intention of ensuring that each CBA investor who participates in the settlement will receive compensation of approximately 55% of that part of their total losses allocated to CBA under a model developed by ASIC.
The calculation takes into account the compensation CBA has already provided to Storm investors under its earlier resolution scheme.
The compensation package also provides other benefits to Storm investors who borrowed from CBA:
- if, after compensation is applied to an investor's outstanding Storm-related margin loan, the investor is still in negative equity on their margin loan, the balance of the loan will be written off; and
- an investor granted an interest-payment moratorium by CBA will have that moratorium interest written off.
Storm investors can visit ASIC's Storm investor website if they have questions about the settlement. Storm investors who are unable to access the website can also call ASIC's Client Contact Centre on 1300 300 630 to request a printed copy of the information on the website.
ASIC cannot offer legal advice to investors in Storm. Storm investors should seek their own independent legal advice.
18 September 2012