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Friday 10 October 2014

14-264MR ASIC welcomes Westpac's payments to CGIC investors

ASIC has welcomed a decision by Westpac Banking Corporation (Westpac) to offer to make payments to an additional seven investors in a failed scheme operated by Capital Growth International Club Pty Ltd (In Liquidation) (CGIC) following their contact with former Westpac Home Finance Manager, David St Pierre.

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

Specifically, ASIC's 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 $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.

As part of ASIC's ongoing investigations into CGIC and Mr St Pierre, ASIC 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.

ASIC acknowledges Westpac's ongoing commitment to achieving a resolution for the benefit of CGIC investors.

ASIC’s investigations into the CGIC, its failure and its officers are ongoing.


Mr St Pierre was a Home Finance Manager at Westpac between September 2000 and April 2011.

During his employment at Westpac, Mr St Pierre had involvement in providing loans to All About Property Developments Pty Ltd (In Liquidation) (AAPD), the real estate arm of CGIC, as part of a property development scheme operated by CGIC and AAPD. Mr St Pierre submitted loan applications for approval to Westpac when he knew they contained false information and were supported by false documents.

Some of the 18 customers to whom the loan applications related were elderly or vulnerable and with limited financial means, yet in spite of this Mr St Pierre encouraged them to borrow against their homes, some of which were unencumbered, to invest in the scheme which promised returns of 15–25% per annum to investors. The customers received monthly interest payments from the scheme after they invested in it, however, the interest payments stopped shortly before a liquidator was appointed to CGIC and AAPD on 28 February 2011, which left the customers without sufficient income with which to repay their loans to Westpac.

Last updated: 10/10/2014 12:00