The corporate regulator will rely on professional indemnity cover to help recoup up to $14 million in Westpoint losses from liquidated WA firm Brighton Hall Securities.

The Australian Securities and Investments Commission (ASIC) filed an application for leave to begin proceedings against the company in the Federal Court in Perth last week.

It alleges Brighton Hall Securities was negligent in its investigation of Westpoint products and in its subsequent advice to clients.

Due to the company’s liquidation “it is anticipated that the funds available to satisfy this claim will be limited to any available insurance proceeds,” the regulator said.

“ASIC has filed this application following negotiations with the relevant parties aimed at preventing the need to commence litigation.”

An ASIC spokesman told insuranceNEWS.com.au the claim would be made against the firm’s professional indemnity policy but declined to disclose the name of the insurer.

Perth brokers contacted by insuranceNEWS.com.au were unable to identify the name of the insurer concerned.

About 170 investors stand to gain from the case, which is due to return to court on November 16. It is the 19^th civil action launched by ASIC on behalf of Westpoint investors.

The regulator has now launched compensation proceedings against seven financial licensees that recommended Westpoint products.

Last month ASIC reached a confidential settlement with Queensland firm Professional Investment Services, subject to court approval.