find the latest legal job
Senior Associate - Litigation & Dispute Resolution
Category: Litigation and Dispute Resolution | Location: Melbourne CBD & Inner Suburbs Melbourne VIC
· Come work for a firm ranked in Lawyers Weekly Top 25 Attraction Firms
View details
Associate - Workplace Relations & Safety
Category: Industrial Relations and Employment Law | Location: Brisbane CBD & Inner Suburbs Brisbane QLD
· Employer of choice · Strong team culture
View details
Freelance Lawyers
Category: Banking and Finance Law | Location: All Perth WA
· Freelance opportunities through Vario from Pinsent Masons
View details
Freelance Lawyers
Category: Other | Location: All Adelaide SA
· • Qualified lawyer with a strong academic background
View details
Freelance Lawyers
Category: Other | Location: All Melbourne VIC
· • Qualified lawyer with a strong academic background
View details
NAB faces more plaintiffs in class action

NAB faces more plaintiffs in class action

A court order has forced National Australia Bank (NAB) to send its shareholders a fresh invitation to join a class action run by Maurice Blackburn.

The Supreme Court of Victoria directed NAB on Monday (3 September) to write to 230,000 shareholders informing them of the opportunity to join the class action. The court also ordered the publication of notices in national newspapers targeting investors who held NAB shares between 1 January and 25 July 2008.

Jacob Varghese (pictured), principal lawyer on the class action, told Lawyers Weekly that the court order was sought to gain a realistic sense of the quantum of the claim to “allow meaningful settlement discussions before the trial”.

The deadline for this registration process is 12 October and the trial is scheduled to begin on 3 December.

Varghese urged affected shareholders to join the class action, rather than pursue an independent claim. He indicated that going it alone would be expensive as NAB has publically stated it expects to spend around $20 million on legal costs.

“If you’ve lost in the thousands, you don’t want to expose yourself to an adverse cost risk of $20 million,” he said. “Only by pooling claims together is there any hope of pursuing NAB in a commercially sound way.”

In July 2008, NAB revealed it had lost up to $1 billion in the US mortgage crisis, which caused the bank’s biggest share price drop since 1987. The lawsuit alleges that NAB did not properly disclose to shareholders and potential shareholders the level of its exposure to “toxic” sub-prime mortgage assets in the US, claimed Varghese. The bank, like all listed companies, has an obligation under the Corporations Act to disclose any information that could have an impact on its share price.

“Thousands of investors who bought shares in that period were, we say, misled and suffered losses as a result,” he said.

NAB told the market in May 2008 that it had provisioned $181 million in respect of its $1.2 billion collateralised debt obligations (CDOs) to cover investment losses, a figure investors viewed as conservative, Varghese explained. Two months later, the provision rose to $1.1 billion, or 90 per cent of the value of the CDOs, which caused NAB’s share price to plunge by nearly $6.

Around 250 institutional and retail investors are involved in the court proceedings, which were launched in 2010.

Varghese revealed that the class action took more than two years to launch because the firm was eyeing the outcome of the Multiplex Brookfield decision in the Federal Court, a case that triggered government discussion on whether to subject class actions to the same regulatory regime as managed investment schemes (MIS). The case effectively stopped fundi­ng of new class actions from late 2008 until mid-2010 when the government announced it would exempt litigation-funded class actions from the MIS regime.

Like this story? Read more:

QLS condemns actions of disgraced lawyer as ‘stain on the profession’

NSW proposes big justice reforms to target risk of reoffending

The legal budget breakdown 2017

NAB faces more plaintiffs in class action
lawyersweekly logo
Promoted content
Recommended by Spike Native Network
more from lawyers weekly
Scales of Justice
Oct 19 2017
‘Ego status’ compelled ex-lawyer to defraud $2.97m, court told
Debarred lawyer John Gordon Bradfield told an NSW District Court that he was driven by “ego status...
Australian Lawyers Alliance (ALA), Queensland’s new industrial manslaughter legislation,
Oct 19 2017
ALA welcomes ‘tough’ Qld manslaughter laws
The Australian Lawyers Alliance (ALA) has welcomed Queensland’s new industrial manslaughter legisl...
Legal podcasts, tune in, microphone
Oct 19 2017
Legal podcasts you have to tune in to right now
The rise of the internet has hailed in a new dawn for storytelling. Here’s our top pick of podcast...
APPOINTMENTS
Allens managing partner Richard Spurio, image courtesy Allens' website
Jun 21 2017
Promo season at Allens
A group of lawyers at Allens have received promotions across its PNG and Australian offices. ...
May 11 2017
Partner exits for in-house role
A Victorian lawyer has left the partnership of a national firm to start a new gig with state governm...
Esteban Gomez
May 11 2017
National firm recruits ‘major asset’
A national law firm has announced it has appointed a new corporate partner who brings over 15 years'...
opinion
Nicole Rich
May 16 2017
Access to justice for young transgender Australians
Reform is looming for the process that young transgender Australians and their families must current...
Geoff Roberson
May 11 2017
The lighter side of the law: when law and comedy collide
On the face of it, there doesn’t seem to be much that is amusing about the law, writes Geoff Rober...
Help
May 10 2017
Advocate’s immunity – without fear or without favour but not both
On 29 March 2017, the High Court handed down its decision in David Kendirjian v Eugene Lepore & ...