Investors in failed ponzi scheme Ross Asset Management have filed a legal claim against the ANZ bank. Photo / Steven McNicholl
Investors in failed ponzi scheme Ross Asset Management have filed a legal claim against the ANZ bank. Photo / Steven McNicholl
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 withthe backing of around 200 investors.
John Strahl, spokesman for the investors, said that number had grown to around 350 as of 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.
Strahl said there were 651 investors eligible to join the claim, although some had passed away since making the investment and he was now dealing with their estates or trustees.
Despite RAM being Wellington based, the 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, with Ross travelling around the country talking to people.
Strahl said investors were mostly retirees, with some having multiple millions invested and others tens of thousands.
He was reviewing those investments as part of his role and says he became uneasy about the RAM investment because he didn't know anything about David Ross.
When he made enquiries 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"So we asked for the money to be withdrawn."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.
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 occasions where it would go to court.
"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 Zealand based 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.
