Commonwealth Financial Planning, the investment adviser owned by Commonwealth Bank of Australia, gave bad advice that cost its clients millions of dollars, Maurice Blackburn Lawyers claimed in a lawsuit.
Maurice Blackburn, which sued Commonwealth Financial Planning in March on behalf of individuals who lost a combined A$4.3 million ($4.4 million), filed a group lawsuit in Sydney federal court today on behalf of other investors. The number of investors in the latest suit hasn’t been determined, Ben Slade, a managing partner at Maurice Blackburn, said at a news conference today.
The investors claim Don Nguyen, an adviser at Commonwealth Financial Planning, steered clients to aggressive, high-risk investments when he knew it wasn’t appropriate for them. Nguyen was fired and the complaints were reported to the Australian Securities and Investment Commission, Commonwealth Bank Chief Executive Officer Ralph Norris said on a call with reporters today.
“I wanted to be secure,” Elizabeth Saunders, a retired civil servant who lost A$200,000 from April 2007 to 2008, said at the news conference. Nguyen “didn’t take my interest into consideration.”
The bank has been cooperating with ASIC, Norris said.
“Having been his employer, we will take responsibility,” Norris said.
Maurice Blackburn filed the class-action lawsuit because some of Nguyen’s former clients weren’t happy with settlement offers made by Commonwealth Financial Planning and had been contacted by “claim farmers,” or companies offering to settle the claims for a fee, Slade said.
“It’s not good enough for CFP to determine what the losses are,” Slade said.
Maurice Blackburn had reached settlements with Commonwealth Financial Planning on behalf of some of the investors in the previous suits, Slade said. Terms of those settlements are confidential, he said.