Australia’s financial regulator has said it welcomes a move by Westpac Banking Corporation to offer to make payments to an additional seven investors in a failed scheme operated by Capital Growth International Club Pty (In Liquidation) (CGIC) after recently contacting former Westpac Home Finance Manager, David St Pierre.

Australia’s financial regulator has said it welcomes a move by Westpac Banking Corporation to offer to make payments to an additional seven investors in a failed scheme operated by Capital Growth International Club Pty (In Liquidation) (CGIC) after recently contacting former Westpac Home Finance Manager, David St Pierre.

In March 2014, the Australian Securities and Investments Commission permanently banned Mr St Pierre, of Mt Nathan in Queensland, from engaging in credit activities and providing financial services. He was banned after an ASIC investigation into his activities arranging loans for people to invest in CGIC, a statement from ASIC said.

Specifically, the investigation found that between July 2008 and June 2010, Mr St Pierre:

-- submitted loan applications to Westpac for approval when he knew they contained false information and were supported by false documents;
-- failed to prepare an authority that accurately identified the payee of a cheque with the result that a customer cheque for A$215,000 was paid into the personal trading account of a non-office holder of CGIC, and
-- enabled and encouraged customers to borrow funds from Westpac and earned a financial advantage in the form of cash bonuses on the loans, in addition to his base salary, despite knowing that they were either elderly, a pensioner, a carer or suffering from a disability, and would not be able to repay the loan if the scheme failed.

Westpac has already compensated a small number of customers who borrowed from Westpac through Mr St Pierre, in relation to the amounts they borrowed to invest in the CGIC and in relation to their legal fees, ASIC said.

As part of ASIC's ongoing investigations, it became aware of seven additional cash investors who did not borrow funds from Westpac but claimed to have had some direct contact with Mr St Pierre before making their investment in CGIC.

“ASIC welcomes Westpac's decision to make payment offers to these additional cash investors in response to the circumstances of the individual investors and the alleged dealings with Mr St Pierre. Westpac has provided investors the opportunity to receive independent legal advice regarding the offer made by Westpac,” it said.