Update on global mediation
The global mediation has been adjourned allowing negotiations to continue between the parties to the mediation in respect of the unresolved matters.
ASIC Chairman Tony D’Aloisio said on 14 September 2009 the global mediation had been a very beneficial process.
‘The collapse of the Westpoint Group involved many distinct Westpoint funds, a large number of financial planners and advisers, different classes of investors, receivers and liquidators in a complex network of legal claims and rights.
‘Confidentiality obligations prevent further information being released at this stage but ASIC expects to make further announcements in the near future’, Mr D’Aloisio said.
Related Westpoint matters
ASIC continues to participate in the mediation of claims against other Australian financial services licensees. If these matters can be resolved at mediation and the settlements are individually approved by the Court, it is expected that the settlement process will, in each case, be similar to that in the Bongiorno matter. These other claims are:
- In March 2008, ASIC commenced proceedings against Strategic Joint Partners Pty Ltd (SJP) on behalf of the firm’s clients, alleging negligence and breach of licence conditions by SJP in recommending Westpoint products.
- In August 2008, ASIC commenced proceedings against Glenhurst Corporation Pty Ltd on behalf of clients who had invested in Westpoint products on the advice of Glenhurst. As Glenhurst was in liquidation, ASIC subsequently commenced proceedings against the company’s professional indemnity insurer QBE Insurance.
- ASIC also has claims against a further Australian financial services licensee: Dukes Financial Services Pty Ltd (now known as Barzen Pty Ltd) on behalf of clients of those firms.
ASIC also has claims against directors of Westpoint companies and the Westpoint auditors, KPMG. These claims are also the subject of the global mediation which has been adjourned, however the litigation against the directors and KPMG will continue alongside the mediation process until any settlement is reached. As the mediation process is confidential, ASIC cannot make any further statement at the present time as to the progress of negotiations with the directors and KPMG. If a settlement of these claims or any of them can be reached, further announcements will be made at the appropriate time. In the event that any settlements with the directors and/or KPMG do occur, any compensation is likely to be paid to the mezzanine companies to be administered by the liquidators of the companies concerned and included in the amounts which may form the subject of any distributions by the liquidators. Further information as to this process will be included in future information provided for investors.
ASIC will keep Westpoint investors apprised of the outcome of the global mediation and progress of these cases via this dedicated website (westpoint.asic.gov.au).
Background to global mediation
ASIC obtained court orders on 28 January 2009 for a global mediation of all Federal Court actions commenced by ASIC to recover compensation arising from the failure of the Westpoint group. Justice Ray Finkelstein ordered that the parties against whom ASIC has taken action (being the alleged directors, various financial planners and a trustee) participate in a joint mediation.
On 6 March 2009, Justice Tony Pagone in the Supreme Court of Victoria ordered that the parties to the compensation proceeding commenced by ASIC against KPMG, the former auditor of various Westpoint companies, participate in the mediation.
A global mediation of all actions commenced by ASIC on behalf of investors for compensation arising from the Westpoint Group took place at various times between 15 June and 1 September 2009. The mediation was conducted by former High Court Judge, the Honourable Ian Callinan AC QC in Melbourne.
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ASIC Website: Printed 04/24/2014