Ponzi lawsuit for $80m
More than 550 victims of the Ross Asset Management (RAM) Ponzi scheme have signed up to take legal action against ANZ Bank, seeking nearly $80 million in damages.
The first hearing in the case is due to take place at the High Court in Wellington next week, where ANZ will seek to have the case struck out.
On Tuesday, fraudster David Ross was released from prison having been granted parole four years before the end of his sentence. He was jailed in 2013 for 10 years and 10 months for his role in a huge $115m Ponzischeme fraud, which ripped off more than 700 investors.
Investor spokesperson John Strahl said investors would argue ANZ Bank had seen warning signs Ross was misusing Ross Asset Management client money.
‘‘We believe there is clear evidence the ANZ Bank was aware that David Ross, an ANZ Bank client of some 20 years – a relationship from which the bank profited – was operating outside the bank’s own commercial guidelines and that Ross was misusing RAM investor funds,’’ Strahl said.
‘‘Yet the ANZ Bank chose to take no action, allowing the Ponzi scheme to grow and flourish at the expense of RAM investors.
‘‘In the opinion of our lawyers, ANZ Bank is culpable for negligence in managing the RAM bank accounts in the way it did and for actions of knowing receipt and dishonest assistance in relation to payments made by RAM through the ANZ Bank.’’
The case was only able to proceed after the Financial Markets Authority fought ANZ through the courts for the right to release information, relating to the bank’s handling of RAM accounts, to investors.
‘‘It fought the FMA all the way to the Supreme Court, attempting to stop the facts coming out and they lost.
‘‘Now it is using its considerable financial might to delay this class action,’’ Strahl said.
‘‘It is in the public’s best interest for this class action to be heard in full before a judge,’’ he said.
The 554 investors who have signed up to the class action made up more than 90 per cent of eligible investors.
Some were deceased estates because a number of Ross’ victims died before the case could get to court.
‘‘Given the time that has elapsed since the collapse of this country’s largest Ponzi scheme in 2012, this number sadly includes a growing number of deceased estates,’’ Strahl said. ‘‘It is estimated there are now 17 such estates which have joined the action.’’
The class action is being funded by LPF Group, which specialises in litigation lending, earning its profits by taking a share of any compensation ordered by courts. Other cases it has funded include the claim by kiwifruit growers against the Ministry of Primary Industries over the PSA outbreak in 2009.