Federal Court approves settlement for SMSF class action
The Federal Court of Australia has approved a settlement for a class action initiated by an SMSF against a financial institution, following advice they received from Sherwin Financial Planners.
On 14 March 2016, Bank of Queensland Limited (BOQ) announced that proceedings had been filed in the Federal Court of Australia against BOQ and DDH Graham Limited (DDHG).
The proceedings were initiated by Petersen Superannuation Fund Pty Ltd on its own behalf and on behalf of certain customers who received advice from Sherwin Financial Planners Pty Ltd, now in liquidation, and who held and deposited funds into BOQ Money Market Deposit Account (MMDA) administered by DDHG as a result of this advice, according to a BOQ statement dated 26 February 2018 on the ASX.
An amended notice of proposed settlement issued to group members involved in the proceedings states that the Petersen Superannuation Fund, together with other persons in the class, were advised by Sherwin Financial Planners Pty Ltd (SFP) or other persons and companies associated with SFP to deposit funds into a BOQ MMDA for the purpose of investment.
The document states that Petersen alleges that “Sherwin acted without authority and fraudulently in respect of the funds invested in Petersen’s BOQ MMDA”.
“Petersen contends that BOQ and DDH, as operators and administrators of the Petersen MMDA, ought to have been on notice of any suspicious activity taking place, including any indicia of fraud, on the Petersen MMDA by Sherwin, pursuant to the obligations owed by BOQ and DDH to Petersen under the terms of the MMDA.”
The document stated that BOQ and DDH deny Petersen’s allegations.
On 26 February 2018, BOQ announced on the ASX that a settlement had been reached in relation to the class action with the applicant. BOQ and DDH agreed to terms for the settlement of the proceeding without any admission of liability, which was subject to approval by the Federal Court.
Under the terms of the settlement agreement, the settlement sum is to be kept confidential.
The settlement was approved by the Federal Court on 30 May 2018.