Managed Funds Macquarie reFleXion Dec 07- Variation Offer

Article about client losses from Macquarie Private wealth

Wed, 20 Aug, 12:00 AM

Macquarie?s advice losses to swell




Client losses from Macquarie Bank?s financial planning scandal are set to surpass those experienced by the Commonwealth Bank of Australia.

Preliminary examinations of claims by ex-Macquarie clients have found their financial damages are larger than the losses of CBA clients who sought legal advice, the lawyer representing former Macquarie clients alleges.

?Their [ex-Macquarie clients] losses are tending to be significantly bigger than the losses that we?re seeing with CBA,? Maurice Blackburn?s John Berrill said.

The Commonwealth Bank of Australia has already paid more than $52 million to affected clients to reduce its own wealth headache, with further payments likely.

He said a comparison of losses from the company?s CBA clients with those of the legal firm?s Macquarie clients found the Macquarie losses are larger.

On Friday Macquarie issued more than 160,000 letters to current and former clients of its Macquarie Private Wealth (MPW) business, inviting them to raise concerns about the advice they received from MPW advisers.

Since Monday, Maurice Blackburn has been contacted by more than 40 former Macquarie clients.

He said a large number claimed to have been pressured into investing with the Macquarie products during public investment seminars.

The clients claim to have lost between $25,000 and $4 million between them as a result and believe they were targeted because they manage their own finances through their self-managed superannuation funds.

He was quick to point out that the financial claims were ?raw losses?, with claims for damages likely rise significantly.

The products clients claim to have been pushed into are the Macquarie reFleXion Trust, Macquarie Exquinox and MQ Gateway Trust.

In certain cases clients were forced to take out loans with the bank and when they were unable to repay the loans were slugged with more than $10,000 in exit fees, he said.

He said there is also evidence the clients were hit with payments of $10,000 in commissions to MPW advisers over the course of the loan. Some clients were locked into products for between five to seven years.

Despite mounting evidence, it is not yet clear as to whether Maurice Blackburn will file class action proceedings against Macquarie.

?[We?re undertaking] a due diligence exercise to see where they [client claims] fall. Whether the individual actions or whether there is a potential for a class action,? he said.

 

Looks Like Mac Bank and I will end up in court

I borrowed 500k for the nov 2006 trust. I paid about 225k in interest and held on till maturity. That occurred on 30/6/14. Mac Bank deposited 106k in my account which was the fx profit they made on the deal. I transferred it to my CBA acct. Mac Bank said the payment was a mistake and demanded repayment. I refused. They threatened litigation. I sought advices from Maurice Blackburn and have an arguable case because Mac Bank did not provide a Statement of Advice [SOA] prior to accepting my investment. We tried to settle but they won't move much. They are going to sue me for the the 106k and I am going to cross claim for the damages of 225k + interest on that + costs and argue that they did not provide an SOA as required by law and if they had done so I would not have invested and suffered huge financial damage. They have not yet served the Statement of Claim for their 106k but I am expecting it in Feb 2015. We will respond with a defence and a cross claim for about 400k. This is not a class action but one that I am self funding. Sort of like David and Goliath. I suspect that if I win the litigants will certainly come out of the woodwork. If anyone wants to chat to me about the legal advice please message me with your email and I will certainly respond.

 

Hi - anything further on legal action in relation to the Reflexion Trust investments?

 

Same here. In fact the tax return requires me to pay tax on income that was never distributed to me as a client and is supposedly the 16E deductions claimed during the life of the investments. Anyone complete their tax return for 2013 that can shed light on this?

 

Yes, I will be suing Macquarie for damages in litigation to commence very shortly. Ask yourself these questions:
1. It is capital guaranteed. So why would they send our investment money overseas? All they had to do was keep it in Aust invested in safe security and borrow the equivalent in the other countries at very low interest rates. If they did that its a fraud. But its yet to be proved. Note there are 2 secret internal contracts that Mac Bank will not release. They will be subject to subpoena.
2. Mac Bank set a fx rate 7.5 years in advance hugely in their favour. Does that amount to unconscionable profiteering?
3. They failed to provide Statement of Advice and if they had done so, no one would have invested.
Looks like I am alone against Goliath at the moment.

 

Having been clobbered with the 2007 Reflexion offer which matured last year, I am now speaking to MBL about this. I invested through a (so called) financial advisor, and while hindsight is a wonderful thing, the capital protection selling point seems somewhat suprious as the loan repayment on maturity was well in excess of the original loan. So the repayments are not only interest, but then a capital sum on maturity. Irrespective of a badly performing stock market, how was this product ever going to make money for the investor in the first place?

 

more questions about MAC BANK REFL TRUST

1. If our money was invested in foreign markets why did the PDS cover issues such as foreign interest rates as something that must be a risk for the investor? It can be argued that foreign interest rates are irrelevant because the money invested was not borrowed in foreign jurisdictions. Or was it? They never answer this question. If Mac Bank did not send the investors money overseas as required by the PDS then they may have borrowed at all time low rates and kept the investors cash in Aus. Now if they did that then guess what you call it.
2. Why have secret internal contracts the terms of which were never disclosed to the investors?
3. Why did they not provide an Advice as required by law?

Will be interesting litigation.

 

hi everyone!
I too was invested in reflexion and also lost. Please message me if you read this as I have really interesting news regarding this product - and the way forward!