The admission by the Commonwealth Bank of Australia (CBA) of its involvement in the collapse of financial planning group Storm Financial will open the possibility for litigation by investors, according to the Storm Investors Consumer Action Group (SICAG).
"Action is entirely possible now that the bank has admitted its involvement in providing loans to clients of Storm. If CBA does not reach a negotiated settlement with its clients then litigation will occur," SICAG co-chair Mark Weir said.
He said there is now a growing body of evidence that there was an element of malpractice by the bank, which is supported by current submissions made to the Parliamentary Joint Committee on Corporations and Financial Services.
The committee met last night with committee chair Bernie Ripoll, already foreshadowing that bank chiefs will be called upon when the enquiry holds its public hearings next week.
Yesterday, CBA issued a statement that the bank was involved, while not directly, with the loans made out to Storm clients.
"In some cases we have identified shortcomings in how we lent money to our customers involved with Storm Financial," CBA chief executive Ralph Norris said.
The SICAG will be working with its legal representative Slater and Gordon in trying to reach a settlement with CBA.
"Hopefully soon the CBA will return to the business of banking and we, the victims of Storm, can return to getting on with our lives," Weir said.
