SLATER & GORDON says the action it is taking in New South Wales against Professional Investment Services (PIS) is just one of several it expects to be asked to take against financial advisers that recommended investments in the failed development company Westpoint Corporation.
The bid to recover more than $2.2 million in losses for 22 clients filed in the NSW Supreme Court last week follows a similar action in Queensland against another financial planner who advised investing in Westpoint.
The manager of Slater & Gordon’s NSW offices, Ken Fowlie, said the NSW action would be seen as a test case for other Westpoint investors. Its present clients are each seeking to recover between $50,000 and $300,000 which they invested in the Westpoint’s Ann Street development in Brisbane.
“We believe that this is likely to be a vehicle that is likely to test the responsibilities of financial planners when it comes to providing advice to their clients,” Fowlie said.
He said their clients claim that PIS financial advisers gave them inappropriate advice and made misleading statements about the Ann Street investment and Westpoint.
“It is very likely that there will be a series of actions commenced dealing with different financial planning organisations,” Fowlie said. “We expect that we will shortly receive instructions to commence similar actions on behalf of other investors against other financial planning organisations [that recommended investing in Westpoint].”
Grahame Evans, managing director in the NSW state office of PIS, said: “We do not walk away from our obligations but we will be defending the action vigorously.” Deacons will be defending PIS in the action.