The major concern for the regulator was whether the roughly 30 per cent of class action members who had helped fund the action were gaining an unfair advantage over the other members.
The settlement was the result of a class action brought against the bank by Sydney law firm Levitt Robinson.
Under the settlement, Macquarie Bank is required to pay $82.5 million, inclusive of legal and administrative costs, in final settlement of the claims of 1,050 Storm clients who took out margin loans with the bank, ASIC stated.
The roughly 315 investors who funded the class action are to be reimbursed for their legal costs and also compensated for approximately 42 per cent of their investment losses (as estimated by Levitt Robinson), while around 735 Macquarie borrowers would get about 18 per cent of their losses returned.
ASIC said it intervened during proceedings in the Federal Court of Australia on 2 May 2013 to express concerns about matters “affecting the fairness of the deal”, but the settlement was approved on 3 May.
The appeal relates to “the distribution of the money, which is not in proportion to losses suffered” and whether the members funding the action were gaining an unfair advantage over the other 70 per cent of members.
ASIC’s appeal also related to whether inadequate notice was given to class action members of the prospect of payment of a funder's premium.
“Settlement of a class action should be undertaken in the interests of the class action group as a whole,” said ASIC deputy chairman Peter Kell.
“ASIC’s appeal raises the question whether this settlement was unfair to the 70 per cent of class action members who did not, or were unable to, contribute to the funding of the action.”
ASIC said its various actions in connection with Storm continue, including proceedings brought in part on behalf of two former Storm investors against Macquarie Bank, Bank of Queensland, and Senrac.
ASIC alleges unconscionable conduct in connection with their dealings with Storm investors. The trial is scheduled to start on 3 June 2013.
ASIC also alleged Macquarie Bank, along with Bank of Queensland, was “knowingly concerned in the conduct by Storm of an illegal managed investment scheme”.
