Storm Financial victims slam Bank of Queensland settlement

Bank of Queensland is under fire for not being up front with Storm Financial victims. Photo: Glenn Hunt
Bank of Queensland is under fire for not being up front with Storm Financial victims. Photo: Glenn Hunt

Storm Financial victim Frank Ainslie, 73, has accused the Bank of Queensland and the corporate regulator of a lack of transparency over the calculations of a $17 million settlement for victims caught up in the scandal.

"The biggest problem is that the people concerned [the victims] have never really had all the details of what's been proposed," he said.

"We need transparency ... we're signing off on something we don't even fully understand."

The settlement was approved yesterday by the Federal Court and includes an additional $2.7 million to be paid in respect to the cost of the class action.

According to the Australian Securities and Investments Commission and the Bank of Queensland, the $17 million sum that will be paid to victims represents 45 per cent of their total losses.

But this figure is being disputed by Mr Ainslie, who believes it may represent only 26 per cent of the incurred losses.

"The settlement was formed by the number of loans given out by Bank of Queensland, but we've only been told the total dollar value of those loans."

"I've done my own calculations and according to this $17 million is only 26 per cent, but until we know how many loans there are I can't justify this figure either. There's just no transparency."

Financial services firm Storm Financial collapsed in early 2009, causing investors to lose more than $3 billion. ASIC accused BoQ of knowingly being involved in the running of the unregistered managed investment scheme, but the bank admitted no fault despite settling.

Mr Ainslie is not alone in his views on the case. There are many other Storm Financial investors who feel that ASIC failed them and that those responsible had gone unpunished.

Another victim, who did not want to be named, said he agreed with Mr Ainslie's views, and said after two lengthy conversations with the Australian Securities and Investments Commission he believed it "may as well not exist".

"To me it is a waste of taxpayers; money."

A spokesperson for Bank of Queensland said in a statement the settlement figure was determined by an ASIC-developed model.

"A description of the model was in the settlement scheme sent to all customers," the spokesperson said.

"BoQ is pleased to have reached a resolution to this long-running issue and will now work towards providing certainty to customers who were involved."

In the coming months, eligible customers will have the ability to accept the settlement payment or stay on their existing repayment arrangements with the bank.

Mr Ainslie said he ultimately he wants to know how much money he and other victims will be receiving under the settlement.

Levitt Robinson Solicitors principal Stewart Levitt, the lawyer who represented the victims in the class action, said the settlement was a fair amount and that the calculations behind it were complex.

"It's not calculated based on the number of loans. It's done on the individual circumstances of the people involved ... It's not something anyone other than an actuary could calculate," he said.

"It is not a straight reflection of what people lost. The calculations tracked the investment over the entire period [until Storm Financial's collapse]."

Mr Levitt said $17 million was a fair amount of compensation.

"The majority of people were taken serious advantage... but let's not entirely exonerate the consumers... not everyone geared themselves into the stratosphere," he said.

"This isn't an unfair settlement, I'm not entirely satisfied with the outcome but there has to be a degree of compromise. This is a substantial achievement."

This story Storm Financial victims slam Bank of Queensland settlement first appeared on The Sydney Morning Herald.