AN ELDERLY woman who lost her life savings of $1 million in the Trio/Astarra fraud has succeeded 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 a number of the Astarra funds.
Mr Culleton said the court action was launched 10 months ago in the NSW Supreme Court against six defendants.
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," Mr Culleton said.
He said the terms of the settlement were confidential, and declined to name the financial adviser but said it was not the high profile Wollongong planner Ross Tarrant, who is fighting a seven-year ban imposed on him by the corporate regulator.
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", and only mainstream superannuation funds supervised by the Australian Prudential Regulation Authority were eligible for government compensation after the fraud.