BOQ to Defend ASIC Action
ASIC has today released a statement announcing that it has lodged legal proceedings against parties including Bank of Queensland, seeking compensation for investors arising out of the collapse of Storm Financial.
The Bank has had the benefit of extensive legal advice and believes that it has not acted illegally or dishonestly and it is our intention to defend this action vigorously.
In announcing the Bank’s position, BOQ Managing Director David Liddy said “At BOQ we have a responsibility to all of our stakeholders and we believe it would be irresponsible for us to breach our responsibilities and not fight this action.
“In saying that, we have every sympathy for customers who lost money through the collapse of Storm Financial; we too put faith in the regulatory system and can understand our customers’ frustration at the collapse of a financial planner that had the tick of approval from government regulators.
“While we were hopeful of reaching an agreement with ASIC to assist our customers, we want to reassure more than 100 of our customers who we are providing financial assistance to that we will continue to do so, regardless of the ASIC litigation. Our intention is to help our customers without disadvantaging our shareholders or setting a dangerous precedent of funding the losses of customers who have lost money while investing in managed funds or the share market. We pledged last year that we will work with customers to keep them in their homes, and we will honour this pledge.
“There has been some confusion regarding BOQ’s involvement with Storm, so let me set the record straight:
• A number of banks lent money to Storm-referred customers but BOQ never provided margin loans, never promoted Storm Financial products, never managed geared equities and never took any commission from Storm – we simply provided standard home equity loans to customers who wanted to use their equity for investment purposes.
• There was no formal business relationship between BOQ and Storm Financial. BOQ was not a corporate banker of Storm Financial - BOQ was not involved in the establishment of the business or privy to inside knowledge regarding Storm Financial.
• BOQ provided loans to approximately 370 Storm-referred customers – ASIC advised in 2008 that Storm Financial had approximately 3,000 customers using margin loans to invest in market-linked investments.
• BOQ employed independent valuers separate from Storm Financial for all home valuations when assessing home equity loans.
• All Storm-referred customers were able to service their loans fully until Storm Financial collapsed. We had a zero default rate and no complaints from customers who had invested in Storm Financial prior to its collapse.
“We would have liked to have been able to comment earlier however have been legally prohibited from doing so by ASIC and given this matter will now proceed to court we won’t be able to comment going forward.
“For that reason, we felt it was important we provide some clarity and facts regarding BOQ and Storm Financial today.”