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Slater and Gordon is investigating a potential class action against Professional Investment Services Pty Ltd (PIS) and possibly other financial advisors, after being approached by mum and dad investors who lost money after an olive farm-based investment scheme in Queensland collapsed.
More than 350 Australians had invested approximately $25 million in the Brooklyn Park Organic Olive Groves Bonni-Foi Project managed investment scheme when the responsible entity, Australian Green & Gold Ltd (AGG) announced its intention to wind up the investment scheme in September 2011.
Slater and Gordon Practice Group Leader Ben Whitwell said it appeared from the firm’s investigations that most investors were likely introduced to the investment on the advice of authorised representatives of Queensland based Australian financial services licensee PIS.
“Our investigations also indicate PIS advisors failed to adequately explain the risks involved in the investment and failed to offer any alternative investments,” Mr Whitwell said.
“The Corporations Act requires Australian financial services companies to know their products and their retail clients’ personal circumstances, and then recommend investments that are appropriate.
“The proposed action will allege the relevant financial advisors did not recommend an appropriate product when they recommended the Bonni-Foi investment.
“These are mum and dad investors who were given assurances there were safeguards in place to protect their investment, but our investigations indicate PIS advisers failed to disclose to investors that the structure of the scheme meant this was not necessarily the case,” Mr Whitwell said.
Gary and Dorothy Sempf were advised to invest a large chunk of their superannuation in the scheme, meaning their retirement plans were put on hold when the scheme folded.
Mr Sempf, now 54, says while they were semi-retired, both have had to return to full-time work.
Mrs Sempf has returned full time to her role as a social worker and Mr Sempf has had to return to 12 hour days in the sand and gravel business.
Neither see that they will be able to retire in the near future.
“We just feel so devastated by the whole process and we feel we have been completely misled by the advice we were provided with,” Mr Sempf said.
Another investor, George Terpos, who was advised to take out a loan to invest in the scheme echoed Mr Sempf’s sentiments.
“We were given a guarantee that there were safety nets in place that meant this was a secure, long term investment,” Mr Terpos said. But that turned out to not be the case.
“It’s like taking out a home loan to buy a home, and then having the agent turn around and tell you that you don’t own the home. You still have a loan, but you don’t own the home,” he said.
Mr Whitwell said a number of clients had already contacted Slater and Gordon about the failed investment and he expected more to come forward.