Levitt Robinson Solicitors was mentioned in a report in Queensland’s Sunday Mail dated 28 September 2014, entitled ‘Bank of Queensland $20m compo payout a hollow win for Storm Financial victims’.
The report related to the $22.1 million settlement achieved by Levitt Robinson on behalf of its clients in a class action lawsuit against the Bank of Queensland over loans provided to Storm Financial investors.
The Mail‘s Daryl Passmore noted that the compensation payable under the settlement would provide some relief to Storm victims, however Mark Weir, the co-chairman of Storm Investors Consumer Action Group, was quoted as saying that there was “a very sour taste” in people’s mouths over the alleged failure of the Australian Securities and Investments Commission to pursue any prosecutions in regarding related events.
The report went on to say that:
Last week’s deal resulted from a class action brought by Levitt Robinson Solicitors. The agreement prevents them and their clients from commenting but the legal firm was critical of the corporate watchdog in a submission to a Senate inquiry into ASIC.
“No ASIC civil prosecution has been initiated against Matthew Buchanan or Declan Carnes, who, through Senrac Pty Limited, owned the North Ward (Townsville) franchise and have been responsible for 267 out of 319 of the Storm home loans,” it said.
“Carnes and Buchanan continue to operate the North Ward franchise of BOQ to this day with impunity – thanks to ASIC.”
Documents filed by Levitt Robinson in court as part of the class action allege that Mr Buchanan and Mr Carnes were familiar with Storm’s risky “double-geared” model of using equity and margin loans to fund new indexed share investments.
They allege the bank knew there was a risk that Storm would not give independent or adequate advice. As a result, the action alleged, BOQ had engaged in unconscionable conduct and breached the Banking Code.
Neither Mr Buchanan nor Mr Carnes returned calls from The Sunday Mail.
A BOQ spokesman said the settlement included acknowledgment by all parties that BOQ denied any wrongdoing.
“The decision to settle was a commercial one that will help provide certainty,” he said. He would not comment on what, if any, action the bank had, or would, take against Mr Buchanan and Mr Carnes.
In it’s editorial, the Mail was scathing of ASIC’s “inability to bring to account some in the banking and financial services industries”, which it labelled “one of the greatest failings of Australian society over the past two decades.”
The Mail went on to editorialise that:
Despite what most people would acknowledge as disgraceful banking practices, [Bank of Queensland employees] have seemingly got away with it. ASIC doesn’t care which is such a shame because its job is to protect innocent Australians from these opportunists. On that basis, if ASIC can’t knock our financial services industry into shape, it’s time they were replaced with an organisation that can. Otherwise this will happen again. And again.