Investors who have been ripped off on a grand scale can take their case to court but the financial and emotional costs can be high
It was supposed to deliver the 380 clients of jailed financial planner Bradley Sherwin some compensation after he defrauded them of their $60 million life savings. But the class action against the Bank of Queensland and its agent DDH Graham delivered them only $12 million, a payout that was almost matched by the $11.75 million bill from their lawyers, funders and administrators. The service providers wanted 98% of their payout, leaving the claimants with a miserly $250,000. The dudded investors, who had been in the courts for six years, felt screwed over once again, says Beth Spence, who together with her husband, Mick, lost their retirement nest egg of $500,000. But this time it was by the very people who claimed to be “on their side”.
“To get nothing or minuscule amounts takes away any trust. It makes us think, why did we bother?” says Beth.
While some class actions go according to plan, often they don’t. As the Spences point out, the claimants were expecting a payout more in the order of $80 million to compensate for the lost earnings and financial hardship.
Thankfully, the costs bill was cut to $8 million by Justice Murphy of the Federal Court and the paltry $250,000 was upped to $4 million – still a long way from the $60 million lost. In a further blow, only 53 claimants received any money because conditions (statutes of limitations) about timing and ruling out any further legal claims agreed to in mediation cut out 75% of claimants.
Beth says the result for the claimants “is as devastating as when this all started almost six years ago”.
This story is from the April 2019 edition of Money Magazine Australia.
Start your 7-day Magzter GOLD free trial to access thousands of curated premium stories, and 8,500+ magazines and newspapers.
Already a subscriber ? Sign In
This story is from the April 2019 edition of Money Magazine Australia.
Start your 7-day Magzter GOLD free trial to access thousands of curated premium stories, and 8,500+ magazines and newspapers.
Already a subscriber? Sign In
Is the public market shrinking?
Australia needs a healthy stock market to give companies access to funds and to allow retail investors to build wealth.
India: three steps to transformation
Massive investment and extensive reforms turbocharge the economy.
The ballet of business
Changing direction, products, models and marketing is a hard task for a business. We chart what it takes to turn a business around, plus profile four successful pivots.
Save money and the planet
Could the high cost of living give us the incentive we need to reduce how much water and energy we use or waste? These eco-friendly household tips will help you do just that.
AI adoption is the new black
Artificial intelligence is set to reshape the commercial world, and small enterprises can’t afford to miss the boat.
Spam attack! Murky laws jam our inboxes
Unwanted marketing material is one of the pain points of modern life.
From rags to riches in style
Rich Tran sported a bowl cut until he was 14 years old and had no intention of becoming a hairdresser.
New work deals are killing the 'old' office
The Covid pandemic and the subsequent lockdowns accelerated the trend to more people working from home. It was a mixed experience.
Points taken: the truth about rewards
Can hopping between credit cards really boost your frequent flyer haul and give you cheap or free travel - or is it doing more harm than good behind the scenes? Money puts it to the test.
Shortcuts to own a home
Innovative ideas with a focus on low costs and sustainability could help solve the housing crunch.