Plaintiffs representing more than 552 investors who lost money under Ross Asset Management’s (RAM) Ponzi scheme have reached a settlement with ANZ in their claim that the bank was negligent in its responsibilities.
David Ross was jailed for up to 10 years and 10 months in prison in November 2013, after pleading guilty to a series of charges relating to his management of RAM, a Wellington investment management firm.
Hundreds of investors believed Ross was running accounts with investments totaling nearly $ 380 million, but instead he had led a massive Ponzi scheme, and the liquidators found only ‘a fraction of the money investors thought they were owed.
ANZ has provided banking services to Ross for over 20 years.
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Earlier this year, ANZ admitted that archived documents that may contain information regarding the fraudulent investment firm Ross Asset Management had been “unintentionally destroyed.”
About 700 investors lost a total of $ 115 million when David Ross’ company collapsed in 2012.
Of the investors, 552 filed a lawsuit against ANZ and argued that the bank knew or should have known that Ross was embezzling their funds.
Investors reached a pre-hearing deal with ANZ on Wednesday for an undisclosed sum.
In early December, investors’ claim against ANZ topped $ 75 million, although the figure that was eventually settled was redacted from court documents.
The sums paid by ANZ will be distributed among the applicants according to their financial losses. Investors have been divided into two groups of RAM investors referred to as Class A and Class B Investors.
The court ruled that the initial 75/25 percent weights assigned to Class A and B claims were outside the available range and the weight was adjusted to 67/33 percent.
In December 2019, spokesperson for Ross Asset Management’s investor group, John Strahl, said that ANZ had benefited from its 20-year relationship with Ross.
“As the largest bank in New Zealand and one of the largest fund managers in Australasia, we believe that ANZ Bank knew how accounts receivable should have been managed and should have known that the way accounts RAMs were being managed was in violation of the laws, ”says Strahl.
ANZ had already fought a three-year battle to prevent the Autorité des marchés financiers from sharing its Ross Asset Management files with investors.
ANZ has been approached for comment.