A WOMAN who lost an entire €308,000 investment over what she claims was misrepresentation by a stockbroking firm about the risk involved had ample opportunity to complain it had been mis-sold to her before the fund crashed, the High Court heard today.
Mary Carty-Doyle (50), a factory supervisor from Loughrea in Galway, wants an order setting aside a decision by the Financial Services Ombudsman to reject her complaint against Goodbody Stockbrokers over its advice in relation to the investment.
She invested st£260,000 (€308,000) in 2005 through Goodbody into what she said was sold to her as a fund put mainly into commercial property in Northern Ireland.
She claims it was represented to her as a safe investment with potentially good returns but Goodbody says it was high risk and this was explained to her.
It is claimed that despite being told it was mainly commercial property the investment was in, it turned out that it was predominantly residential and suffered accordingly because of the economic crash and was wiped out by 2009.
It is claimed it was never made clear to her a huge portion of the fund would be invested in building land, including residential land, and to effectively prop up ailing building firms like Taggart Developments which went into administration in Northern Ireland.
Ms Carty-Doyle complained to the Ombudsman that Goodbody was in breach of duty and breach of contract by failing to properly advise her before she invested. She also says the risk was not adequately explained to her.
The Ombudsman ruled in favour of Goodbody which had argued the investment was appropriate for an investor of her experience, risk tolerance and objectives.
She appealed that decision to the High Court against the Ombudsman with Goodbody as notice party, who both dispute her claims.
Today, Paul Anthony McDermott, for the Ombudsman, said even though Ms Carty-Doyle had been made aware, after making the investment, of the residential element in the fund, she had not told Goodbody to get her out of it. It was not until it was wiped out, due to a global crash, that complained about it, counsel said.
Seamus O'Tuathail SC,(instructed by Owen Swaine solicitor)for Ms Carty Doyle, earlier told the court the Ombudsman had failed to probe the high risk nature of the investment.
There were issues over whether Goodbody portfolio manager TJ Scully represented to her that a warning as to the investment risk was merely precautionary or pro-forma and that any such warning had not been communicated her in writing until after she had parted with her money in December 2005, counsel said.
There was a further issue over whether there was reckless leveraging - borrowing to increase the value of the fund - of the overall investment which originally was supposed to be €20m but ultimately was more than ten times that, counsel said.
Up until 2009, Goodbody had informed her the fund was worth around Eur€259,000, or an 18.2 per cent drop in the original fund, but seven weeks later told her it was worth nothing, counsel said.
The amount of leveraging, was a significant factor in wiping out the value of the investment, he said.
There was also a conflicts of interest between groups of Goodbody investors in the fund and the Ombudsman appeared to have almost completely ignored this, he said.
The hearing continues before Mr Daniel Herbert.