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Storm Financial collapse sees Bank of Queensland fined $17 million

BANK of Queensland will be the third bank to pay victims millions in compensation following the collapse of Storm Financial.

19/08/2009 NEWS: 19/08/2009 NEWS: Storm Financial information session, Kirwan. More than 500 investors in the failed wealth advisor, Storm Financial, attended last night's meeting. JJ239961 JJ239961
19/08/2009 NEWS: 19/08/2009 NEWS: Storm Financial information session, Kirwan. More than 500 investors in the failed wealth advisor, Storm Financial, attended last night's meeting. JJ239961 JJ239961

BANK of Queensland will pay $17 million in compensation to customers caught up in the Storm Financial scandal.

The bank agreed to the payout as part of a settlement of legal action brought by the corporate watchdog and borrowers who were advised by Storm before its collapse in 2009.

The gross payment by the bank to settle the legal action will be $19.7 million, including $17 million for customers caught up in the scandal.

Other costs associated with the case will mean the bank suffers a $22.1 million hit to its accounts.

Acting chief executive Jon Sutton said customers eligible for compensation would be contacted and had the option of either accepting a settlement or remaining on their current repayment plan.

“We are pleased to have reached a resolution to this long-running issue and will now work towards providing certainty to the customers who were involved,” he said in a statement on Monday. However, while customers will be compensated, the terms of the settlement includes an acknowledgment by all parties that the bank denies any wrongdoing.

Townsville-based Storm collapsed with debts of $88 million, with some customers losing their entire investments and homes.

The Australian Securities and Investments Commission launched legal action against BoQ, Macquarie Bank and the Commonwealth Bank following Storm’s collapse.

The watchdog sought compensation for investors who borrowed money and suffered losses on investments made through Storm. The Commonwealth Bank and Macquarie Bank have previously agreed to compensate customers.

Originally published as Storm Financial collapse sees Bank of Queensland fined $17 million

Original URL: https://www.themercury.com.au/business/companies/banking/storm-financial-collapse-sees-bank-of-queensland-fined-17-million/news-story/3c54c283e3fb5b99b15de993d24b4fb8