AN ELDERLY woman who lost her life's savings of $1 million in the Trio/Astarra fraud has succeed in having most of her money returned following a court settlement with her financial planner.
The settlement is believed to be the first time that investors who lost $176 million in an offshore hedge funds fraud have been compensated by their adviser.
Lawyer Martin Culleton, for the Wollongong firm RMB Lawyers, said the woman and her husband had invested principally through a self-managed super fund in several of the Astarra funds.
The court action was launched 10 months ago in the New South Wales Supreme Court against six defendants, Mr Culleton said.
It was claimed the adviser had engaged in misleading and deceptive conduct, negligence, breach of fiduciary duty and breaches of the Corporations Act.
Mr Culleton said it was important that people investigated both their financial planner, and the companies they worked for during the time they provided advice.
"The difficulty for the law is trying to decide what was reasonable, as to what the financial advice was," he said.
He said the terms of the settlement were confidential, and declined to name the financial adviser, but said it was notthe high-profile Wollongongplanner Ross Tarrant, who isfighting a seven-year ban imposed on him by the corporateregulator.
Mr Culleton said as far as he knew, no disciplinary action had been taken against the adviser in this case.
The successful outcome gives some hope to thousands of investors who were left stranded because they had invested in Trio/Astarra through self-managed super funds.
The Minister for Financial Services and Superannuation, Bill Shorten, explained that these investors were "swimming outside the flags".
He said only mainstream superannuation funds supervised by the Australian Prudential Regulation Authority were eligible for government compensation after the fraud.