Former client says Macquarie Bank took advantage of his ignorance and financial vulnerability



Posted

June 01, 2018 08:11:13

A former Macquarie Bank client says he contemplated suicide after losing hundreds of thousands of dollars with the investment bank, and then being offered a low compensation offer.

David, 56, from New South Wales, invested about $300,000 with the bank in 2004.

The money was compensation for a workplace injury which had left him with little or no prospect of ever working again.

His case has formed part of a joint Background Briefing and 7.30 investigation into Macquarie Bank’s treatment of financial advice customers.

With Macquarie Bank, David was offered a $3 million margin loan, while his money was leveraged and used to buy about $12 million in shares.

Meanwhile, Macquarie collected about $50,000 in fees.

David complained about his treatment in 2006.

In 2007 the bank flew him to Sydney for a meeting where it made him a $25,000 compensation offer.

David, who also suffers post traumatic stress syndrome (PTSD), said Macquarie Bank took advantage of his ignorance and financial vulnerability at the meeting.

“They made me an offer, a ridiculously low offer, and then assured me that that was the best I could do,” he said.

“We were up pretty high, I said do these windows open, I may as well jump out.”

He said during the meeting one executive suggested he not approach the media.

“He said, ‘Of course you could go to the media, Dave, but of course today’s news is tomorrow’s fish and chip wrapper’,” he said.

On the way home from the meeting David said he considered suicide, and eventually accepted an offer of $44,000.

Bank accused of being ‘reckless’

Eight years later he approached law firm Maurice Blackburn hoping to have his case looked at again.

Principal lawyer Josh Mennen said David did not know much about his financial rights when he approached the firm.

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“He had been continually told by Macquarie that he didn’t have a case and that indeed the advice given to him was appropriate despite the fact that it had largely resulted in financial ruination,” he said.

David took his case to the Financial Ombudsman Service.

In August last year ombudsman Nicole McCutcheon handed down her decision and found Macquarie Bank’s conduct was “reckless and took advantage of David’s vulnerability.”

“[Macquarie Bank] delayed the proper settlement of this dispute and have left the applicant without the means to attempt to provide for himself and his family,” she said.

“The panel is concerned by the manner in which the applicant says he was treated in settlement negotiations and how this impacted his mental health.”

The panel found David lost about $104,000, but awarded him extra costs and interest, bringing the total payment to $175,000.

Macquarie Bank did not respond to specific questions about David’s case, but said in a statement it did not agree with the ombudsman’s decision.

The investment bank pointed out that David’s case was only able to be heard by the financial ombudsman because the investment bank waived the usual six-year time limitations.

Macquarie said it always acted in the best interest of clients. The bank said at all times it seeks to act in the best interests of clients.

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banking,

australia



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