CBA to settle the Storm
(22 June 2009 – Australia) CBA has tried to settle the issue of its involvement with Storm Financial, by issuing an apology and admission of wrongdoing.
The bank acknowledged that, while it did was not directly responsible for the difficulties faced by Storm Financial investors, the problem does involve the bank.
Commonwealth Bank chief executive officer, Ralph Norris, said that in some cases the bank has identified shortcomings in how it lent money to its customers involved with Storm Financial.
The bank has also said that it will be liable to any obligations to any clients that have come into financial difficulty as a result of CBA’s lending practices, increasing the possibility of out-of-court settlements.
Specifically, Norris said the bank would meet its obligations to those customers identified as being in financial difficulty as a result of any shortcomings identified in the bank’s lending practices.
However, Norris said that the bank is not responsible for the financial advice provided independently by Storm Financial to the CBA’s customers. That was clearly the responsibility of Storm Financial, a licensed financial advisory company, he said.
The bank reportedly said the Storm Financial issues affect about 2,500 of its customers. ASIC said in its application to wind up the company that about 3,000 customers were affected in total.
Bank of Queensland (BOQ), second only to CBA as a lender to Storm Financial, is yet to follow CBA’s lead and will likely be involved in a court battle.
Commonwealth Bank chief executive officer, Ralph Norris, said that in some cases the bank has identified shortcomings in how it lent money to its customers involved with Storm Financial.
The bank has also said that it will be liable to any obligations to any clients that have come into financial difficulty as a result of CBA’s lending practices, increasing the possibility of out-of-court settlements.
Specifically, Norris said the bank would meet its obligations to those customers identified as being in financial difficulty as a result of any shortcomings identified in the bank’s lending practices.
However, Norris said that the bank is not responsible for the financial advice provided independently by Storm Financial to the CBA’s customers. That was clearly the responsibility of Storm Financial, a licensed financial advisory company, he said.
The bank reportedly said the Storm Financial issues affect about 2,500 of its customers. ASIC said in its application to wind up the company that about 3,000 customers were affected in total.
Bank of Queensland (BOQ), second only to CBA as a lender to Storm Financial, is yet to follow CBA’s lead and will likely be involved in a court battle.
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