Litigation firm Slater & Gordon has confirmed it is pursuing financial services firm Paragem Partners over its involvement with compliance work it conducted into Storm Financial.
“We’re certainly investigating a claim against them because they were the auditor of the compliance of the AFSL [Australian financial services licence] in May 2007,” Slater & Gordon group practice leader Damian Scattini said.
“Paragem gave them the all clear and said Storm had a robust compliance regime, whereas in fact it’s safe to say they did not.
“We’re investigating their conduct, so it’s safe to say that no-one doing their job could have concluded that they had a robust compliance regime.”
Scattini would not confirm when Slater & Gordon had approached Paragem Partners, nor would he confirm how long the investigation into Paragem’s involvement with Storm would take.
However, Paragem managing director Ian Knox said the firm had not been contacted by Slater & Gordon and, furthermore, the compliance work it had conducted was restricted to whether Storm was in breach of the regulatory framework and as such had no involvement in reviewing the group’s advice proposition.
“We’re not aware of any claim and we haven’t been contacted with a relation to a claim against us. We did not undertake any compliance work for Storm connected with advice. Paragem was not involved in reviewing advice files or reviewing the quality of advice given to consumers,” Knox said.
“We made no representation to any party other than to the responsible managers with regard to whether or not they met the regulatory framework in operating their AFSL.
“We believe they met the operating standards and we subsequently noted that the Ripoll review confirmed that Storm hadn’t been in any breach of any regulatory environment.”
Knox said the only contact Slater & Gordon had made with Paragem was around the time following Storm’s collapse.
