Five hundred actions by customers of ACC Bank over alleged losses resulting from borrowing to invest in tracker bonds have been settled at the Commercial Court.
The settlement was announced to Mr Justice John Cooke yesterday afternoon following complex negotiations, including with people in the Netherlands where ACC’s parent Rabobank is based.
The judge had on Tuesday begun hearing an action on behalf of four investors which was expected to decide issues key to all of the actions but was adjourned to facilitate talks. Yesterday, John Gordon SC, for the claimants, told the judge there was a “comprehensive” solution to the litigation and a contingent settlement had been executed in relation to some 500 claims against the bank. There had been 410 cases, but the talks went beyond those and the final settlement would capture some 500 cases, the court was told.
The four plaintiffs in the case at hearing accepted claims of fraud made by them against ACC could not be sustained and they unreservedly withdrew those, said counsel. The judge agreed to dismiss those claims in all four cases.
Mr Gordon said no such claims were ever advanced in relation to intermediaries Financial Engineering Network and Field Financial and those cases were adjourned for mention to December 13th next.
Hugh O’Neill SC, for ACC, said it wanted to make clear the fraud claim, now withdrawn, was only made in relation to the four cases before the court. The cases concerned Solidworld bond schemes which were popular among Irish investors in 2003 and 2004, with some €650 million worth of geared tracker bonds sold to more than 1,000 people who borrowed an average of €200,000 from ACC to invest in the bonds. Most investors took out loans with ACC to buy the bonds and claimed losses arising from interest repayments on those loans.
In opening the action for the four investors in Solidworld5 bonds, Mr Gordon said ACC had marketed the bonds as “low-risk” despite being aware of concerns by the regulator, actuaries and within the bank about borrow to invest products.
