CBA Subject Of Class Action Law Suit Filed By Storm Investors

Australian banking major CBA will have a class action law suit filed against it by investors who lost their money during the collapse of Storm Financial.

The class action law suit will be filed today on behalf of former Storm investors who are not satisfied with the already agreed compensation deal.

Storm Financial, which was based in Townsville collapsed during the height of the global financial crisis in 2008 with debts worth millions of dollars owed to investors.

Many investors lost their savings, after following through on advice given by the company to borrow against their homes, and use the proceeds to invest in the stock market.

The strategy failed spectacularly when the global economy took a dive.

Storm undertook negotiations for its customers with major lenders including CBA.

Earlier in the year the CBA agreed a legal settlement which would include 2,000 former Storm clients. The deal would include cash payouts and reductions in mortgages for those who found themselves affected by poor lending practices.

Steven Levitt a lawyer who represents the plaintiffs in the class action suit said many people were unhappy with the proposed settlement and intend as a result to pursue class action against CBA.

Mr. Levitt added that the legal action taken against CBA would be the first in a series to be initiated against major lenders.

Stephanie Carmichael, also from Levitt Robinson, said the class action involved about 300 disaffected clients.

“They’ve decided to pursue their legal interests,” she said.

“It’s a potential class action of 1,200.”

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