More clients have lost money from a former CBA planner as the bank delays legal proceedings.
Commonwealth Financial Planning has requested additional information on the particulars of the statements of claim made against it by Maurice Blackburn Lawyers on behalf of the ex-clients of a former bank authorised representative.
As a result, the financial planning arm of Commonwealth Bank of Australia has not yet filed its defences against the claims with the New South Wales Supreme Court and will not do so until further details are received.
"It's not an uncommon tactic and it has the effect of stringing out the various cases. We are currently preparing the responses," Maurice Blackburn partner John Berrill said.
The original statements of claim were issued against the bank in early April on behalf of seven Commonwealth Financial Planning clients who had lost a total of $4.3 million as a result of investment advice they received from former authorised representative Don Nguyen.
In the normal course of events the bank should have filed its defences with the court within a month from the time the client's claims were served.
"They had a month to put in their defences but the statements of claim are very long so it would take them a while to get through all of that," Berrill said.
He said he was not expecting the process to be a short one.
When Commonwealth Financial Planning was satisfied with all of the information it had requested, he said he was anticipating a response in the form of a series of denials.
"They would usually respond to the allegations with broad denials. After that all parties will go before the court and the court will set a timetable for the exchange of information and documents," he said.
"Then there can be a mediation and if that doesn't resolve the matter, then a hearing date will be determined. That all takes some time to play out."
Commonwealth Financial Planning had previously said it would vigorously defend the actions against it through the courts should that be required.
While the current action being taken against the bank's financial planning arm is on behalf of seven people, the number may not be limited to this group.
Since filing the original claims against Commonwealth Financial Planning, more clients who have lost money as a result of advice given to them by Nguyen have been in touch with the law firm to investigate any action that may be available to them that would allow their losses to be recouped.
Of the clients who have commenced legal proceedings against the bank, Harold and Norma Levinson have lost the largest amount of capital, with $2.5 million of their money having evaporated due to the investments they were advised to take out.
Other victims include a self-managed superannuation fund, Jomida Enterprises, which has lost $1 million.
Nguyen is no longer employed by Commonwealth Financial Planning.
The two non-consecutive alphabetic letters encountered most often last week caused more controversy than the underlying policy they represented, Wouter Klijn writes.... read more »
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