tmmonline.nz  |   landlords.co.nz        About Good Returns  |  Advertise  |  Contact Us  |  Terms & Conditions  |  RSS Feeds

NZ's Financial Adviser News Centre

GR Logo
Last Article Uploaded: Monday, December 30th, 8:18PM

News

rss
Latest Headlines

Judge keeps Ross ponzi class action alive

The High Court at Wellington has declined ANZ Bank’s attempt to get a suit from more than 500 investors of failed Ross Asset Management thrown out early.

Wednesday, May 6th 2020, 2:18PM 1 Comment

Justice Jillian Mallon ruled today that the $80 million class action must go to trial.

The investor case alleges David Ross’s former bank, ANZ, knew certain payments misapplied RAM client funds and the bank dishonestly assisted RAM's breaches of trust, benefited from charging fees and interest through RAM's misused overdraft, and breached a duty of care in negligence.

Ross Asset Management was the country's largest ponzi scheme when it collapsed in late 2012. More than 800 investors believed more than $450 million was being managed on their behalf but actual losses were closer to $100 million. About $10 million has been recovered.

In a 65-page decision, the judge says that while the plaintiff’s claim might need some tidying up, the way it is formed does not prejudice the bank and the case needs to go to trial.

She said there was an only a “subtle” difference in the way the parties viewed the law of dishonest assistance, and the pleadings covered all of the requirements subject to “some residual issues.”

Document discovery first

While the investors had not specified who the ANZ managers were who assisted RAM to misapply client funds, that issue was premature.

“The plaintiffs cannot be expected to provide the particulars when it has received some of the information from the FMA in a redacted form following ANZ’s unsuccessful court proceeding opposing its disclosure. After discovery and the provision of further particulars on this point, there may or may not be an issue about aggregation. If there is an issue, it will be better considered on the facts.”

Assessing the knowing receipt claim, the judge said that the law was not settled as to whether the standard of the banker having “should have known” was high enough.

“This is more appropriately considered when the facts at trial are determined,” the judge wrote.

While suggesting other ways the arguments could be clarified, the judge said the investors could do that at a more appropriate time.

The judge also dismissed the notion that the investors could be out of time to bring a claim, saying that could also be argued at trial.

“In deciding who is right about this, the court may be assisted by the facts – for example, which investors were able to withdraw funds without suffering loss and why that was; and to what extent did RAM legitimately invest client funds in investments and account to those clients on those investments.”

She ordered that the bank pay the investors’ costs.

Not made public

A preliminary issue for the judge was the publication of evidence through what is known as the Sletcher affidavit, which contains volumes of emails that the Financial Markets Authority obtained, which show internal ANZ communications discussing the RAM accounts. There are heavy redactions to these emails.

The ANZ said that evidence was not admissible but the judge said she would consider it. However, the judge declined to make the affidavit available to the public, saying that would be unfair to ANZ if the documents were released before a trial.

“Open justice considerations were met by allowing media representatives to attend and report on the hearing of the strikeout application. This judgment and the substantive hearing will also meet open justice objectives.”­­­

The claim has been a long time coming, as the FMA had to fight the bank for the disclosure of documents which have helped form the case. The FMA was finally able to give the documents to investors in April last year.

The case is being funded by LPF Group. Under its deal, the litigation funder takes 25 percent if it settles before July, and 30 percent thereafter. More than 500 investors have signed up.

Tags: ANZ ponzi Ross Asset Management

« Pandemic will reset all markets, economist saysMann on a mission to diversify financial advice »

Special Offers

Comments from our readers

On 7 May 2020 at 8:55 pm John Milner said:
It appears the ANZ is still comfortable putting shareholders before customers. You would have thought they would have learnt some lessons from their CDO debacle where they kicked and screamed before finally refunding customers. But not until they were put under extreme duress from the government.

Sign In to add your comment

 

print

Printable version  

print

Email to a friend
News Bites
Latest Comments
  • The good guys get told off
    “Very prudent points as always @JohnMilner. Whilst I don’t disagree with the process, I question any advantages from the...”
    7 days ago by Pragmatic
  • [The Wrap] The year that was - and what may happen next year
    “Hope you have a good recovery Phil. Interesting points 1.Box ticking already happening with SOA 's that look identical...”
    8 days ago by Very Frustrated Adviser
  • [The Wrap] The year that was - and what may happen next year
    “Nice summary Phil. In short: . Consumers will expect more from the industry for less . Advisers will be increasingly time...”
    8 days ago by Pragmatic
  • The good guys get told off
    “I can't quite reconcile the rationale, or lack thereof, with the comments so far. Pathfinder were found to have made misleading...”
    11 days ago by John Milner
  • The good guys get told off
    “As a follow on to this conversation: I'm assuming that the Regulator will be consistent by 'naming and shaming' the other...”
    11 days ago by Pragmatic
Subscribe Now

Weekly Wrap

Previous News
Most Commented On
Mortgage Rates Table

Full Rates Table | Compare Rates

Lender Flt 1yr 2yr 3yr
AIA - Back My Build 4.94 - - -
AIA - Go Home Loans 7.49 5.79 5.49 5.59
ANZ 7.39 6.39 6.19 6.19
ANZ Blueprint to Build 7.39 - - -
ANZ Good Energy - - - 1.00
ANZ Special - 5.79 5.59 5.59
ASB Bank 7.39 5.79 5.49 5.59
ASB Better Homes Top Up - - - 1.00
Avanti Finance 7.90 - - -
Basecorp Finance 8.35 - - -
BNZ - Classic - 5.99 5.69 5.69
Lender Flt 1yr 2yr 3yr
BNZ - Mortgage One 7.54 - - -
BNZ - Rapid Repay 7.54 - - -
BNZ - Std 7.44 5.79 5.59 5.69
BNZ - TotalMoney 7.54 - - -
CFML 321 Loans 5.80 - - -
CFML Home Loans 6.25 - - -
CFML Prime Loans 7.85 - - -
CFML Standard Loans 8.80 - - -
China Construction Bank - 7.09 6.75 6.49
China Construction Bank Special - - - -
Co-operative Bank - First Home Special - 5.69 - -
Lender Flt 1yr 2yr 3yr
Co-operative Bank - Owner Occ 6.95 5.79 5.59 5.69
Co-operative Bank - Standard 6.95 6.29 6.09 6.19
Credit Union Auckland 7.70 - - -
First Credit Union Special - 5.99 5.89 -
First Credit Union Standard 7.69 6.69 6.39 -
Heartland Bank - Online 6.99 5.49 5.39 5.45
Heartland Bank - Reverse Mortgage - - - -
Heretaunga Building Society 8.15 6.50 6.30 -
ICBC 7.49 5.79 5.59 5.59
Kainga Ora 7.39 5.79 5.59 5.69
Kainga Ora - First Home Buyer Special - - - -
Lender Flt 1yr 2yr 3yr
Kiwibank 7.25 6.69 6.49 6.49
Kiwibank - Offset 7.25 - - -
Kiwibank Special 7.25 5.79 5.59 5.69
Liberty 8.59 8.69 8.79 8.94
Nelson Building Society 7.94 5.75 5.99 -
Pepper Money Advantage 10.49 - - -
Pepper Money Easy 8.69 - - -
Pepper Money Essential 8.29 - - -
SBS Bank 7.49 6.95 6.29 6.29
SBS Bank Special - 5.89 5.49 5.69
SBS Construction lending for FHB - - - -
Lender Flt 1yr 2yr 3yr
SBS FirstHome Combo 4.94 4.89 - -
SBS FirstHome Combo - - - -
SBS Unwind reverse equity 9.39 - - -
TSB Bank 8.19 6.49 6.39 6.39
TSB Special 7.39 5.69 5.59 5.59
Unity 7.64 5.79 5.55 -
Unity First Home Buyer special - 5.49 - -
Wairarapa Building Society 7.70 5.95 5.75 -
Westpac 7.39 6.39 6.09 6.19
Westpac Choices Everyday 7.49 - - -
Westpac Offset 7.39 - - -
Lender Flt 1yr 2yr 3yr
Westpac Special - 5.79 5.49 5.59
Median 7.49 5.79 5.69 5.69

Last updated: 23 December 2024 5:49pm

About Us  |  Advertise  |  Contact Us  |  Terms & Conditions  |  Privacy Policy  |  RSS Feeds  |  Letters  |  Archive  |  Toolbox  |  Disclaimer
 
Site by Web Developer and eyelovedesign.com