Hundreds sign up in action against firm
Half of RAM investors to make claim against ANZ
More than half of the eligible investors in Ross Asset Management (RAM) have now committed to taking legal action against ANZ bank over how it managed the accounts for the failed financial advice firm. A statement of claim was filed at the High Court in Wellington on July 12 with the backing of about 200 investors from around the country.
John Strahl, spokesman for the investors, said that number had grown to about 350 by Friday and he remained confident “many more will join”.
The investors allege ANZ breached its duties as banker to RAM for negligence in managing the Ross Asset Management bank accounts and for actions known as “knowing receipt” and “dishonest assistance”.
The ANZ has said it was also misled by David Ross — the former head of the failed investment firm. A spokeswoman for the bank said it denied the allegations and would be defending the claims. Wellington financier Ross was jailed for 10 years, 10 months in November 2013 after he defrauded more than 700 clients of $115.5 million.
Only about $10m has been recovered.
Strahl said 651 investors were eligible to join the claim although some had died since investment and he was now dealing with their estates or trustees.
Despite RAM being Wellingtonbased, investors were spread around the country.
“There are lots in Auckland, lots in the South Island and in obscure places like Feilding.”
He said it was largely sold via word of mouth and Ross travelled around the country talking to people.
Strahl said investors were mostly
It could be a lot less than [$50 million] or a bit more. It is likely to be in the tens of millions.
retirees. Some had many millions invested and others tens of thousands.
Legal advice to investors is that the claim could be as much as $50 million plus interest.
But Strahl said the net amount to be claimed should be taken with a grain of salt.
“It could be a lot less than that or a bit more. It is likely to be in the tens of millions.”
Strahl became involved after he was asked to become a trustee on a family trust which he is not a beneficiary of.
“They had already made the investment with RAM.”
He was reviewing those investments as part of his role and says he became uneasy about the trust’s RAM investment because he didn’t know anything about David Ross.
When he made inquiries, he wasn’t encouraged by the responses.
“So we asked for the money to be withdrawn.”
When there were delays in the money coming back, he contacted the Financial Markets Authority, which then began investigating.
He says someone put him forward to be on the liquidation committee for the RAM group of companies and when the FMA got clearance to share the information about its ANZ case they weren’t quite sure how to share it with investors and decided to share it with the liquidation committee.
As a retired lawyer, Strahl said he was then asked to stay on board to help take the claim against the ANZ bank.
The next stage is a hearing on August 15 in which the investors have applied to be endorsed to proceed with a representative action.
As part of that, they expect to get a date for the deadline for investors to sign up to the claim.
Strahl said they had asked for investors to be given a few months to sign up.
“We are encouraging people to get back to us quickly.”
He said he expected the August court date to be the first of many appearances.
“While we would hope there is a quick resolution, we are prepared to go through for the long haul.”
The action is being supported by LPF Group, the largest New Zealandbased litigation funder, which specialises in funding representative actions and large commercial claims.
LPF will fund the costs of the claims on behalf of the investors and will take a fee if successful.
If the claims are unsuccessful, LPF is required to pay the costs of the claims so investors should have no need to pay anything.
John Strahl