Macquarie challenges ASIC
(14 February 2011 – Australia) Investment bank Macquarie has accused the Australian Securities and Investment Commission of vexatious litigation when pursing damages from the collapse of Storm Financial.
Justin Gleeson, SC, the bank’s barrister, said that the federal court should stay or strike out a separate Storm case, brought by ASIC, because a class action was already on foot.
Storm Financial collapsed in 2008, with estimated losses of A$3 billion. Investors borrowed money against their homes to use as margin loans that were then invested into the sharemarket.
Court cases, lodges by ASIC, alleging the banks broke the law in their dealings with Storm Financial's customers, followed ASIC's lengthy yet unsuccessful negotiations with the banks.
ASIC launched court action on behalf of investors on two fronts. In the Federal Court in Sydney, it alleged unconscionable conduct on the part of Macquarie, Bank of Queensland and a BoQ franchisee. In the Federal Court in Brisbane it launched a separate action alleging Macquarie, BoQ and Commonwealth Bank had participated with Storm Financial in an unregistered managed investment scheme (MIS).
Mr Gleeson foreshadowed arguments against the Sydney case being accepted by the court, and outlined Macquarie's position that the Brisbane case should be struck out.
He said two Storm Financial clients taking court action alongside ASIC in Sydney, Barry and Deanna Doyle, were also represented in the ASIC court action in Brisbane. It was vexatious to have to defend court actions on the same issue, he said. Macquarie would ask for ASIC to irrevocably remove the Doyles from any Brisbane class actions. He questioned ASIC's role in taking the case.
Also, ASIC's Brisbane MIS action should be stayed or struck out because a similar class action had been brought by Sydney firm Levitt Robinson. Macquarie's arguments will be heard before judge Arthur Emmett on March 24.
Storm Financial collapsed in 2008, with estimated losses of A$3 billion. Investors borrowed money against their homes to use as margin loans that were then invested into the sharemarket.
Court cases, lodges by ASIC, alleging the banks broke the law in their dealings with Storm Financial's customers, followed ASIC's lengthy yet unsuccessful negotiations with the banks.
ASIC launched court action on behalf of investors on two fronts. In the Federal Court in Sydney, it alleged unconscionable conduct on the part of Macquarie, Bank of Queensland and a BoQ franchisee. In the Federal Court in Brisbane it launched a separate action alleging Macquarie, BoQ and Commonwealth Bank had participated with Storm Financial in an unregistered managed investment scheme (MIS).
Mr Gleeson foreshadowed arguments against the Sydney case being accepted by the court, and outlined Macquarie's position that the Brisbane case should be struck out.
He said two Storm Financial clients taking court action alongside ASIC in Sydney, Barry and Deanna Doyle, were also represented in the ASIC court action in Brisbane. It was vexatious to have to defend court actions on the same issue, he said. Macquarie would ask for ASIC to irrevocably remove the Doyles from any Brisbane class actions. He questioned ASIC's role in taking the case.
Also, ASIC's Brisbane MIS action should be stayed or struck out because a similar class action had been brought by Sydney firm Levitt Robinson. Macquarie's arguments will be heard before judge Arthur Emmett on March 24.
Subscribe