E&P, Dixon Advisory settle class action over alleged conflict

afr.com:

Wealth manager E&P has reached a $16 million settlement deal for class action proceedings over alleged conflicted and misleading advice brought by Shine Lawyers on behalf of former clients of its Dixon Advisory business.

There is no admission of fault attached to the settlement.

Alan Dixon, then managing director and CEO of Dixon Advisory, in his Manhattan office in June 2016. Trevor Collens

That concludes the action against E&P, Dixon Advisory & Superannuation Services, and former executives Alan Dixon and Christopher Brown. Many clients are separately working their way through claims lodged with the Australian Financial Complaints Authority.

In January, Dixon parent E&P tipped the troubled wealth management firm into voluntary administration after determining that mounting liabilities from class actions, settlements and regulatory penalties would leave Dixon insolvent.

As part of that, E&P sponsored a deed of company arrangement for the settlement of all claims, including two class actions led by Shine and Piper Alderman.

Both class actions alleged that clients of the wealth manager suffered significant losses after the firm provided conflicted and misleading advice by steering them into its US residential property fund, known as URF.

URF was a significant fee-payer but performed poorly for investors.

The settlement of the Shine proceedings is subject to Federal Court approval and will be composed of $4 million from E&P (part of which is already set aside) and any available insurance proceeds.

Once approved by the court, Shine’s class action will be dismissed against E&P, former Dixon CEO Mr Dixon and former executive Mr Brown, and permanently stayed against Dixon.

The permanent stay of the Shine action ensures Dixon