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Litigation last resort for Storm investors

The regulator today said it would do what it could to avoid protracted litigation with Storm Financial. _x000D_

user iconThe New Lawyer 19 March 2010 The Bar
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THE regulator today said it would do what it could to avoid protracted litigation with Storm Financial. 

The Australian Securities and Investments Commission today said it is moving to the second phase of its investigation into Storm Financial, in which it will seek commercial resolution. 


It said it had complete a major phase of its investigation into the affairs of Storm. The second stage would last until the end of May this year, and will involve entering into confidential discussions with the individuals and entities that have been the subject of ASIC investigations to see if a commercial resolution can be reached and recommended to investors. 

ASIC said it considered that a commercial resolution, if it could be achieved, would be preferable to protracted litigation. Failing that, it said, it will make decisions on compensation actions it will launch in relation to those individuals and entities. 

The regulator said it would be meeting with representatives of Storm investors and law firm Slater and Gordon, which represents many Storm investors, to outline what it is doing. 

ASIC said that it would be up to each Storm investor to decide for themselves whether to accept the offer made to them as part of the Commonwealth Bank of Australia Storm Resolution Scheme. However, it suggested investors obtain legal advice and consider seeking an extension of time from the CBA to consider acceptance of the offer.

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