ASIC to pursue Storm founders
The Federal Court has given the financial services regulator the green light to pursue the founders of Storm Financial in court over the failure of the dealer group.
The Australian Securities and Investments Commission (ASIC) will seek to ban Emmanuel and Julie Cassimatis from the financial services industry and disqualify them from managing companies, as well as the payment of pecuniary penalties.
ASIC's announcement came after the Federal Court refused to dismiss ASIC's case against the Cassimatises, as per their request.
The regulator stated it will now be asking the court to implement a timetable for the proceedings to be progressed to trial.
"Since Storm's collapse ASIC has been seeking compensation for investors as well as pursuing regulatory action against those companies and individuals intrinsically involved in implementing the Storm model," said ASIC Deputy Chairman, Peter Kell.
Earlier this year, Macquarie Bank agreed to pay $82.5 million to Storm investors involved in a class action against the bank, while the Commonwealth Bank agreed to pay $136 million in compensation.
Furthermore, ASIC recently secured $1.1 million in compensation for Storm investors Barry and Deanna Doyle.
Storm Financial was a Queensland-based dealer group which famously collapsed in 2009 after inappropriately advising some of its clients to invest in margin loans and other debt-based products.
In December 2008, ASIC launched an investigation into Storm's enthusiastic use of margin loans and related advice. At that time, there were 450 clients who owed their margin lender more than the value of their portfolios, equating to $30 million in total.
In March 2009, the Federal Court ordered the dealer group be placed into liquidation.
Almost two years later, ASIC announced legal action against Storm directors Emmanuel and Julie Cassimatis, as well as margin loan providers Commonwealth Bank (CBA), Bank of Queensland and Macquarie Bank.
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