Investors take legal action

More than 50 disgruntled investors intend to take class action against an unnamed stockbroking house in the wake of last week's landmark damages award against Hartleys.

The investors allege that they lost hundreds of thousands of dollars in sharemarket transactions, according to law firm Maurice Blackburn Cashman partner John Berrill. He said that his firm also has a number of complaints by investors against brokers before the Financial Industry Complaints Service. FICS is an industry-owned service to resolve disputes about stockbrokers, financial planners, insurance agents and managed investment funds, but it has a cap of $100,000 for all complaints except life insurance, which is capped at $250,000.

Melbourne-based Slater & Gordon partner Mark Walter says he has received more than a dozen enquiries from investors unhappy with their brokers' conduct. He is about to launch legal action on behalf of a client who allegedly lost around $900,000 from Hartleys between 1999 and 2001.

The proposed actions come at the same time as ASIC is launching a crackdown on the wider investment community, examining players in the insurance and financial investment industries. In Queensland, ASIC is investigating claims that some operators are dealing without licences.

The Hartleys case has focused attention on discretionary investment accounts and the extent to which brokers can operate on behalf of their clients.