ASIC must follow through on Storm litigation

storm-financial/financial-services-industry/financial-planning-group/macquarie-bank/australian-securities-and-investments-commission/

29 November 2010
| By Lucinda Beaman |
image
image
expand image

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.

Read more about:

AUTHOR

Recommended for you

sub-bgsidebar subscription

Never miss the latest news and developments in wealth management industry

MARKET INSIGHTS

So we are now underwriting criminal scams?...

2 months ago

Glad to see the back of you Steve. You made financial more expensive, not more affordable as you claim, and presided ...

2 months ago

Completely agree Peter. The definition of 'significant change is circumstances relevant to the scope of the advice' is s...

4 months 1 week ago

A Sydney financial adviser has been permanently banned from providing any financial services, with the regulator deriding his “lack of integrity, trustworthiness and prof...

3 weeks 1 day ago

Minister for Financial Services, Stephen Jones, has provided further information about the second tranche of the Delivering Better Financial Outcomes (DBFO) reforms....

2 weeks ago

One licensee has lost 27 advisers in the past week, now sitting at zero, according to the latest Wealth Data figures....

3 weeks 1 day ago

TOP PERFORMING FUNDS