ASIC must follow through on Storm litigation
The chair of last year’s parliamentary inquiry into the financial services industry, Labor MP Bernie Ripoll (pictured), has reinforced the need for the Australian Securities and Investments Commission (ASIC) to follow through “with the full force of the law” when it comes to those found guilty of wrongdoing where Storm Financial clients are concerned – regardless of the agreed compensation deals.
Ripoll congratulated ASIC for its decision on Friday to pursue legal action against three of the banks associated with Storm Financial, as well as the founders of the financial planning group. In making the statement, Ripoll reinforced the need for ASIC to play the part of a regulator – rather than just a middle man for compensation negotiations.
Ripoll said ASIC’s statement on the potential litigation highlighted the “capacity for the regulator to not only pursue a commercial resolution but also to follow through with litigation and penalties where it is required”.
“It has always been my view that the full force of the law should be applied to resolve all of the matters in the Storm Financial collapse,” Ripoll said.
He described ASIC’s decision to pursue litigation against Storm Financial directors Emmanuel and Julie Cassimatis, as well as related parties the Commonwealth Bank of Australia (CBA), Bank of Queensland (BOQ) and Macquarie Bank, as a “watershed moment for the long-suffering victims of the Storm Financial collapse”.
Ripoll’s comments came in the context of the regulator saying that although it might pursue litigation against the related parties, it still preferred a commercial resolution to the matter. This is despite the fact ASIC has reason to believe it could prosecute a case stating that CBA, BOQ and Macquarie, in their participation in the ‘Storm Model’, were operating an unregistered managed investment scheme – in addition to other acts of unconscionable conduct under common law.
The regulator has allowed another three-week grace period for compensation discussions to continue, despite not having been able to reach agreement after many months of negotiations.
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