This was a class action on behalf of unit holders in the IPO Wealth Fund (the Fund) against the trustee of the Fund and DH Flinders Pty Ltd (for whom the investment manager of the Fund acted as an authorised representative) (the Respondents). The class action alleged that the Respondents misled investors in the marketing and promotion of the Fund, including by making misleading representations about the likely returns, investment strategy, risks associated with and sources of liquidity available to the Fund, and did not disclose key information to investors before they invested. The Fund was ultimately wound up in September 2020.
In this judgment, O’Callaghan J approved a settlement of the proceeding in the amount of $5.6 million. His Honour held that although the settlement sum was significantly less than the approximately $67 million of losses alleged to have been suffered by class members, the settlement was in their best interests for the following reasons:
His Honour also approved the following deductions from the settlement sum, which he considered were reasonable and proportionate:
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