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On Wednesday 22 February 2006, Slater & Gordon announced its intention to pursue claims on behalf of approximately 2000 investors in the failed Westpoint mezzanine finance schemes.
The Westpoint scandal has affected an estimated 3000 individuals who have lost upwards of $300 million. It is one of the most significant corporate collapses in Australian history, not least because of the extent of the financial hardship that has been and will continue to be caused.
A series of claims will be brought against the 75 to 100 financial planners (including large firms and sole practitioners) that advised clients to enter into the high-risk investments. These planners were actively involved in placing investors into the Westpoint mezzanines in return for which they received extraordinarily high commissions of between 10 and 13%.
Many investors were incorrectly informed that the investment was low risk, or even risk free, with misleading statements made about the efficacy of the security provided by low ranking mortgages, charges and a Westpoint Group guarantee.
The vast majority of investors are those who can least afford to sustain such losses. Retirees with self-managed superannuation funds; young couples; Mum and Dad investors looking to generate additional income to provide for their children's' futures. In many instances, they were advised to borrow against their homes in order to finance higher levels of investment. Quite often the finance was arranged, if not provided, by the financial planners themselves.
Actions are also being investigated against the directors of the mezzanine companies who have emerged as key players in the Westpoint debacle.
It is envisaged that a series of representative or group proceedings will be brought in every State on the Australian mainland. As the only national plaintiff law firm, Slater & Gordon is uniquely positioned to bring its depth of experience and talent to this large-scale litigation.
Litigation funders, IMF Limited, have announced to that they will provide legal funding and support (including adverse cost indemnities) to investors who wish to prosecute their claims. We confirm Slater & Gordon is acting in relation to this matter on behalf of investors in Westpoint mezzanines. Slater & Gordon does not act for IMF.
If you are an investor in a Westpoint mezzanine scheme, please register your interest in this litigation on-line or by calling 1800 555 777.