The first investors who lost their life savings in the Westpoint collapse are expected to be compensated within the next month through the financial industry’s external disputes resolution scheme.
The losses of 14 investors are being considered by a panel within the Financial Industry Complaints Service (FICS), with a total of $828,000 likely to be paid out, FICS Chief Executive Alison Maynard said.
“Fourteen [have been] referred to the panel for determination [and] some of the first will come out in the next month or so,” Maynard said.
The investors lost less than $100,000 each; FICS does not have the jurisdiction to resolve greater amounts. Five are joint complaints where a husband and wife invested together.
FICS would not reveal what financial planners or dealer groups were involved in the panel’s decision.
The complaints body received 336 complaints following the failed West Australian property group’s high-profile collapse in 2005.
FICS proceeded to investigate 172 complaints, of which 18 were resolved outside the FICS compensation system and $1 million was awarded to investors.
The Federal Court recently ruled FICS had the jurisdiction to resolve Westpoint complaints following a legal dispute with a dealer group.
“We had to put everything on hold for three-and-a-half months,” Maynard said.
The process of compensating investors had taken far too long and the corporate regulator was largely to blame, Westpoint Investors Group president Graham MacAulay said.
“Anything people get back is a bonus but ASIC are totally responsible for this mess [as] they allowed an illegal managed scheme to go ahead,” MacAulay said.
